BBC Gossip
  • Home
  • Health
  • News
  • Crime
  • Local News
  • People
  • Guest Post
BBC Gossip
BBC Gossip
  • Home
  • News
  • Health
  • People
  • Celebrities
  • Crime
  • Entertainment
  • Finance
  • Guest Post
Home Trump’s agreement with China on tariffs provides a bit of relief, but questions remain about the future.
  • Local News

Trump’s agreement with China on tariffs provides a bit of relief, but questions remain about the future.

    Trump's tariff truce with China brings some relief but uncertainty over what's next
    Up next
    Going Hogg Wild: Rashida Tlaib Endorses Democrat Running Against Her Democrat Colleague in Michigan
    Rashida Tlaib Supports Another Democrat Over Her Colleague in Michigan
    Published on 12 May 2025
    Author
    BBC Gossip

    WASHINGTON – President Donald Trump’s agreement with China to temporarily slash tariffs for 90 days brought some relief to the world. However, concerns remain about the lingering uncertainty and the potential damage already inflicted by the trade war.

    The agreement reached after discussions in Switzerland saw the Trump administration reducing its tariffs on imports from China from 145% to 30%. In response, the Chinese government decided to lower its retaliatory import taxes on U.S. goods from 125% to 10%, as both sides committed to ongoing negotiations.

    President Trump hailed the reduction in tensions as a win, expressing his intention to engage in discussions with Chinese President Xi Jinping to safeguard the economic ties between the two largest global economies.

    Regardless, the tariffs are now elevated from when Trump took office and the scramble to respond to the White House’s mix of threats and olive branches might leave CEOs, investors and consumers uneasy and unwilling to take risks.

    Trump is going to keep tariffing

    The global economy is not going to back to January 19, 2025, the day before Trump became president. Even if he routinely changes the tariff rates, the U.S. president and his aides have made it clear that most imports will be taxed at a minimum of roughly 10%.

    The 10% figure has been Trump’s baseline. He gave it to most countries for a 90-day negotiating period after his April 2 “Liberation Day” tariff rollout caused a panic in the financial markets. He kept the 10% rate as part of the framework with the United Kingdom announced last week. And Trump’s new 30% tariff on Chinese goods includes 20% tied to China’s role in fentanyl and the 10% baseline applied elsewhere.

    “We have many deals coming down the line,” Trump said on Friday. “But we always have a baseline of 10%.”

    But Trump has also hinted that there could be exceptions. Sectoral tariffs of 25% on autos, steel and aluminum are still in place, with Trump stressing that pharmaceutical drugs will also soon face import taxes.

    Trump said Monday that he told House Speaker Mike Johnson and Senate Majority Leader John Thune to include tariff revenues when looking at how to pay for their planned income tax cuts.

    Reality can now anchor negotiations

    Taisu Zhang, a law professor who studies comparative legal and economic history at Yale University, said the chaos from last month probably was not for nothing. Both countries were testing their strengths, with Trump stressing the importance that foreign companies placed on accessing U.S. consumers and China emphasizing its resilience to an external shock.

    “As recently as February, both sides probably harbored unrealistic assumptions about each other’s economic or political weaknesses or intents,” Zhang said. “The Americans had an exaggerated sense of their own bargaining power to begin with, and the Chinese may have had an exaggerated sense of their security from American economic pressure.”

    “The best thing to come out of this agreement, therefore, seems to be a stronger sense of reality on both sides,” Zhang said. In that, Zhang said, it looks like the goals of the two countries align, with China consuming more and the U.S. manufacturing more.

    The stock market loved the news and could shape what happens next

    The world has seen that Trump remains wary of getting on the wrong side of the financial markets. When his initial April 2 announcement of higher tariff rates fueled a selloff in stocks and rising interest rates on U.S. debt, he retreated by announcing his 90-day suspension of tariffs so that talks could proceed with nations other than China.

    The S&P 500 stock index jumped 3.3% in Monday trading, helping validate the Trump administration’s decision to lower tariff rates so that talks could proceed.

    Beware of the ‘bullwhip’ effect

    If Trump’s 145% tariffs caused fewer boats to leave for U.S. ports, the prospect of a slightly lower tariff rate might cause a stampede of shipping containers to flow across the ocean from China. The possibility of fewer ships from China had raised the risk of empty shelves at U.S. stores, a phenomenon last seen during the COVID-19 pandemic that led to spiking prices and voter frustration.

    But with the fast pivot to a lower tariff rate, the freight sitting in warehouses and factories in Asia can now be hurried onto cargo ships, causing the price of transporting those goods to rise sharply and producing congestion at ports. There is “absolutely” going to be a bullwhip effect in which the shortages now turn into a rush of new supply as companies try to beat the prospect of higher tariffs returning, said Michael Starr, vice president of growth at the logistics company Zencargo.

    “They can now start shipping for the holiday season,” Starr said. “They’re going to rush as many orders out in these 90 days as possible. And yes, the vessels cannot come back as quickly into service as the freight can.”

    There’s little to no certainty about what’s ahead

    University of Michigan economist Justin Wolfers stressed that many people would see the 90-day talks as a short-term positive because “moving tariffs from prohibitive and insane to merely very high is good news.” But over the course of the past four months of the Trump administration, the president has floated 100% import taxes on movies made overseas, threatened Canada and Greenland with annexation and shown a relative indifference to the possible financial pain from his actions.

    “So if you were to look back over those last 120 days, you would say, for as much optimism as you might feel right now, it would be crazy to feel optimistic about anything,” Wolfers said.

    The U.S. economy could still end up hurting

    A problem for Trump is that businesses have already made plans for the 145% tariffs he announced earlier and might be hesitant to revise them until any permanent policies are set.

    It’s possible that a resilient job market can take the hits from tariffs without cracking much, just as it survived Federal Reserve rate hikes under Democratic President Joe Biden that were designed to bring down inflation. But 30% tariffs are still a cost for businesses and consumers to absorb — and that might prevent many companies from hiring and expanding their operations.

    “Maybe some of those could live with 30%, at least for a while,” said Kevin Rinz, a senior fellow at the Washington Center for Equitable Growth. “But in 90 days, what are tariffs with China going to be? Will they go up or down from 30%? If up, how far? I have no idea, and if I were a firm that relies on imports from China, that would cause paralysis.”

    Rinz, who worked as an economist in the Obama and Biden administrations, tried to model the impact of the labor market based on Trump’s own premise that any short-term pain from tariffs would eventually result in long-term gains. His analysis found a drop in hiring.

    “It turns out, that scenario looks a lot like a recession over the next few years,” Rinz said.

    Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

    You May Also Like
    'F1' opens with $55 million, delivering Apple its biggest big-screen hit
    • Local News

    ‘F1’ earns $55 million in its opening weekend, making it Apple’s top-grossing movie.

    The $144 million global launch is Brad Pitt’s biggest opening weekend and…
    • BBC Gossip
    • June 29, 2025
    Trump says he's not planning to extend a pause on global tariffs beyond July 9
    • Local News

    Trump Won’t Extend Global Tariffs Pause Beyond July 9

    President Trump issued a 90-day period for countries and the U.S. to…
    • BBC Gossip
    • June 30, 2025
    Beyoncé and Jay-Z dominate Paris as celebrity drives fashion’s biggest trend
    • Local News

    Beyoncé and Jay-Z Take Over Paris with their Stylish Outfits

    PARIS – In the most recent fashion season, what truly made a…
    • BBC Gossip
    • June 29, 2025
    CIA chief told lawmakers Iran nuclear program set back years with strikes on metal conversion site
    • Local News

    CIA Chief Briefs Lawmakers on Strikes Impacting Iran’s Nuclear Program

    WASHINGTON – According to a U.S. official, CIA Director John Ratcliffe informed…
    • BBC Gossip
    • June 30, 2025
    'Kisses yes, Bezos No,' protesters say, as Bezos wedding bonanza stirs controversy in Venice
    • Local News

    Protesters Oppose Bezos Wedding Extravaganza, Demanding More Kisses, Less Amazon CEO

    The couple’s three-day event included a private ceremony Friday with 200 celebrity…
    • BBC Gossip
    • June 29, 2025
    More than 1M expected at Orlando International Airport ahead of July 4
    • Local News

    Over 1 million travelers forecasted at Orlando International Airport before July 4th

    ORLANDO, Fla. – More than a million people are expected to pass…
    • BBC Gossip
    • June 29, 2025
    Star witness against Kilmar Abrego Garcia won't be deported, court records show
    • Local News

    Court records reveal star witness in Kilmar Abrego Garcia case will not face deportation

    WASHINGTON – According to court records, the Trump administration has agreed to…
    • BBC Gossip
    • June 29, 2025
    'Return to Nature' Funeral Home
    • Local News

    Owner of Penrose funeral home gets 20-year jail term for scamming US government and clients

    DENVER — A funeral home co-owner in Penrose has been sentenced to…
    • BBC Gossip
    • June 29, 2025
    2 men found stabbed to death in separate Aurora cases
    • Local News

    Two men discovered murdered with knife wounds in different instances in Aurora

    AURORA, Colo. — Police in Aurora are investigating two separate homicide cases…
    • BBC Gossip
    • June 29, 2025
    After decades in the US, Iranians arrested in Trump’s deportation drive
    • Local News

    Iranians living in the US for many years detained in Trump’s efforts to deport them

    Donna Kashanian, also known as Mandonna, had been living in the U.S.…
    • BBC Gossip
    • June 29, 2025
    Serbia's populist president announces more arrests after a massive anti-government protest
    • Local News

    Serbian populist president vows further arrests following large anti-government demonstration

    Serbia’s president announced additional arrests of anti-government protesters after clashes with police…
    • BBC Gossip
    • June 29, 2025
    Tourists are trickling into Afghanistan and the Taliban government is eager to welcome them
    • Local News

    Afghanistan seeing a gradual increase in tourist arrivals with enthusiastic reception by the Taliban administration

    Tourists are starting to explore Afghanistan using various modes of transportation like…
    • BBC Gossip
    • June 29, 2025

    Recent Posts

    • Broadway Heartthrob Jordan Donica Joins ‘The Gilded Age’ as Dr. William Kirkland, Love Interest of Peggy Scott
    • Chicago Crime Update: Man fatally stabbed at Navy Pier, suspect critically injured near East Grand Avenue, according to police sources
    • Trump Won’t Extend Global Tariffs Pause Beyond July 9
    • The maker of ‘Squid Game’ compares the show’s villainous VIPs to Elon Musk, saying he is very prominent nowadays.
    • Tragic Turn in Coeur d’Alene Shooting: 2 Firefighters Confirmed Dead, Gunmen’s Identities Unknown
    ‘The Gilded Age’ Introduces Broadway Hunk Jordan Donica as Peggy Scott’s New Love Interest, Dr. William Kirkland
    • US

    Broadway Heartthrob Jordan Donica Joins ‘The Gilded Age’ as Dr. William Kirkland, Love Interest of Peggy Scott

    Denée Benton’s character Peggy Scott may have found the perfect romantic match…
    • BBC Gossip
    • June 30, 2025
    Terror attack: FBI investigating attack in Boulder, Colorado as 'act of terror' | LIVE UPDATE
    • US

    Chicago Crime Update: Man fatally stabbed at Navy Pier, suspect critically injured near East Grand Avenue, according to police sources

    CHICAGO (WLS) — A man was killed in a stabbing Sunday at…
    • BBC Gossip
    • June 30, 2025
    Trump says he's not planning to extend a pause on global tariffs beyond July 9
    • Local News

    Trump Won’t Extend Global Tariffs Pause Beyond July 9

    President Trump issued a 90-day period for countries and the U.S. to…
    • BBC Gossip
    • June 30, 2025
    ‘Squid Game’ Creator Says Show’s Evil VIPs ‘Kind of Resemble Elon Musk’: He’s ‘Everywhere These Days’
    • Entertainment

    The maker of ‘Squid Game’ compares the show’s villainous VIPs to Elon Musk, saying he is very prominent nowadays.

    • BBC Gossip
    • June 30, 2025
    BBC Gossip
    • Home
    • Privacy Policy
    • News
    • Local News
    • Health
    • Crime
    • Guest Post