The Geneva Connection: How The Trump Tariffs Penalize U.S.-China Ties And Global Economic Prospects

2025-05-16 10:30:00 ET

Summary

• Since starting his second term, Trump has slapped 145% tariffs on Chinese goods while Beijing has hit back with 125% duties on American products. That led bilateral trade to nearly dry up, unleashing fears of plunging global prospects.
• In Geneva this week, the US agreed to drop the 145% tax Trump imposed last month to 30%, while China agreed to lower its tariff rate on U.S. goods to 10% from 125%.
• The two agreed to start a formal negotiation process, whereas Washington touted progress toward a deal. Furthermore, the two agreed to establish an “economic and trade consultation mechanism” that would involve recurring discussions.
• If the current tariffs prevail, global growth is expected to drop to 2.8% in 2025 and 3.0% in 2026 - down from 3.3% for both years since the January 2025 update by the International Monetary Fund (IMF).

Despite de-escalation in Geneva, trillions of dollars may have been lost in the unwarranted trade wars. ...

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