Tariff Truce Between U.S. and China Exposes Structural Fragilities in Trade Relations

To ease trade tensions, the United States and China have announced a 90-day truce, significantly reducing tariffs imposed on each other. The agreement, the result of negotiations in Geneva, was welcomed as progress, but analysts warn that structural challenges remain. The information comes from the South China Morning Post.

The pact reduces U.S. tariffs on Chinese products from 145% to 30%, while China lowers its tariffs from 125% to 10%. U.S. President Donald Trump described the agreement as a “total reset” in trade relations.

Wu Xinbo, director of the Center for American Studies at Fudan University, emphasized that Beijing’s firmness was crucial to achieving this outcome. He warned, however, that “it’s best not to harbor illusions, as Trump’s combative volatility and reckless behavior disregarding consequences are very dangerous.”

Dennis Wilder, former National Security Council director for China under President George W. Bush and currently a professor at Georgetown University, noted that the deal shows Trump still seeks “a positive and constructive relationship” with Xi Jinping, with no intention of decoupling or destroying the Chinese economy.

Despite the temporary relief, experts stress that the truce does not resolve the two nations’ deep economic and strategic rivalries. Wu Xinbo warned that the Trump administration may pursue other tools, including technology, investment, finance, security, and foreign policy restrictions, to contain China.

Sensitive issues, such as the flow of fentanyl to the U.S., remain unresolved. Washington accuses Beijing of failing to stop the trafficking of the synthetic opioid, while China considers the problem an internal U.S. issue and deems the related tariffs unjustified.

The agreement’s immediate impact was felt in global trade. Chinese cargo bookings to the U.S. rose by more than 50%, reversing a previous 20–30% drop, according to Rolf Habben Jansen, CEO of Hapag-Lloyd. However, shipping industry leaders caution that this surge may be short-lived, depending on the outcome of further trade talks.

Meanwhile, companies like Walmart have announced price increases, citing continued cost pressures from the trade war. CEO Doug McMillon stated that the tariff reductions are insufficient to absorb the costs without passing them on to consumers.

The new U.S. ambassador to China, David Perdue — a former senator and business executive — arrived in Beijing shortly after the agreement was announced. His appointment is seen as an effort to strengthen diplomatic ties amid ongoing trade tensions.

Although the 90-day agreement provides temporary relief, analysts agree it does not address the underlying structural issues. The path toward a lasting resolution of the trade disputes between the U.S. and China remains uncertain and challenging.

Source: Brasil 247

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