U.S. reduces China tariffs from 145% to 30%, for now

The last few months of PC news has been dominated by one thing: US president Trump’s attempt to implement foreign economic policy using almost nothing but import taxes. The wild and escalating tariffs with China have caused chaos for US businesses and many across the world, but it looks like there will be at least a little stability, if only for a short time.

After passing deadlines that saw American businesses and consumers paying more than double the price for imported goods from China, the two countries have agreed to a temporary, 90-day truce. CNN reports that the US will temporarily lower the import taxes from an unprecedented 145 percent on the most-impacted goods to “just” 30 percent, starting on May 14th. China is cutting its similar American import levies down to 10 percent. China is also loosening its grip on exports for rare earth minerals, among other countermeasures.

Paying a 30 percent import tax on goods is still a huge burden on American businesses that rely on low-cost manufacturing from China, but it’s at least manageable for most. Some businesses were dealing with an existential crisis due to the Trump administration’s policies, with many simply pausing sales in the United States or facing closure entirely.

Even with exceptions carved out for highly visible niches like smartphones and PCs, the electronics industry was — and in many ways still is — facing unprecedented disruption due to import tax rates that shifted weekly, or sometimes daily. The chaotic situation made it impossible to plan any kind of long-term product or sales with any degree of certainty.

In a joint statement issued in Geneva, US and Chinese representatives said that trade talks will be ongoing, presumably aiming for a larger trade deal at the end of the 90-day period. That will probably allow more normalized trade to continue — stock markets have already seen a recovery as economists breathe a sigh of relief, after weeks of watching American ports show an alarming reduction in traffic for imports. It’s worth pointing out that both sides had demanded far greater concessions just days ago.

That said, the situation is still a long way off normal. The second Trump administration has shown itself to be almost entirely unpredictable, so who knows how long the new status quo will remain in place. As of Wednesday this week, imports to America from almost everywhere in the world will still face a 10 percent tax, with steeper levies on some raw materials like steel, though trade deals are allegedly ongoing for other countries and regions.