President Donald Trump announced Monday that the United States and China will avoid a trade war by implementing a 90-day negotiating deal.
The agreement comes after months of back and forth between Trump’s order on tariffs in many global markets. Trump stated that the deal will usher a meaningful change in both countries, according to NBC.
“I think it’s going to be great for unification and peace,” Trump said.
The reduction in tariffs is an advantage for the supply chain as a whole for the United States and China economies. While Trump’s push on tariffs has always been a strong implementation into his policies during his first term, the threats have been imposing new restrictions since the start of his second term.
Trump’s first day in office included putting a 25% tariff on Canada and Mexico in early February. Days later Trump imposed a threat to roll out more Tariffs on different nations. As a result, this led to a timeline of tit-for-tat tactics between the United States and countries invoking a large displacement between the two powerful economies of the United States and China according to AP News.
Here is a timeline of key events leading up to the temporary deal:
February 1
Trump ordered to impose 10% tariffs on China and 25% on Mexico and Canada. This causes retaliatory measures from the three countries.
February 3
Trump puts a 30-day pause on the 25% tariffs on Mexico and Canada. 10% tariffs remain on Chinese imports that go into effect Feb 4.
February 4
China responded by imposing a 15% tariff on the United States and natural gas and 10% on crude oil and agricultural machinery.
February 10
Trump announced a 25% tariff on steel and aluminum imports from all countries and proceeded to take action on reciprocal tariffs.
March 4
Trump pushes another 10% tariff on goods for China and 25% for Mexico and Canada. China responded immediately by adding 10-15% tariffs on agricultural products.
March 12
Steel and aluminum tariffs that Trump posed on Feb 10 are in effect. This forces China to pay 25 percent more with existing tariffs on steel and aluminum.
March 26
Trump implements a 25% tariff on the automotive industry.
April 2
Trump poses a “reciprocal” package targeting several nations and introduced a baseline tax on imports raising significant rates for many nations. Trump also announced a 10% tariff for imports to the United States excluding Mexico and Canada.
April 4
In response to the 25% tariff on cars taking effect. China puts a 34% tariff on all goods on April 10.
April 5
Trump’s 10% global tariffs take place putting China’s tariff at 30%.
April 9
Trump adds an 84% levy for all imports totaling all Chinese goods to 104% on tariffs. China announced a retaliatory tariff on all United States goods promoting a deeper trade dispute between the two economies. As a result, Trump hits the tariff to 145% immediately. Trump pauses the “reciprocal” tariffs on nations except China.
April 11
China raised the 84% tariff on United States imports to 125% for all goods in response to Trump’s efforts. Trump reveals that electronics will not be included in the reciprocal tariffs temporarily.
April 14
Trump announces the possibility of exempting the auto industry from tariffs giving the automotive industry a chance to adjust their supply chains.
April 29
Trump announces orders to push back some of his 25% tariffs for the automotive industry giving import taxes on foreign parts an advantage.
May 12
The United States and China agreed to a 90-day period to strike down tariffs for each other’s goods. The agreement reduces United States goods from 125% to 10% and Chinese goods from 145 to 30%.
With this agreement, China will not uphold its tariffs countermeasures that were put on United States goods in April. The United States tariffs that took place prior to April 2 will remain as well according to ABC.
Investors and stocks have soared after this agreement so far gaining more than 4%. Consumers, however, may still see the effects of the tariffs given the rate of 30% which could increase prices for many Americans on small cargo according to ABC.
When asked if Trump will look to increase prices back to 145% if an agreement is not reached within 90 days, he said that he is looking to raise the tariff even higher, according to ABC.
“They will go up substantially higher. I think you will have a deal however,” said Trump.
Photo Courtesy/NBC News