U.S.-China trade deal deemed a "significant triumph" by Chinese officials

U.S.-China trade deal deemed a "significant triumph" by Chinese officials

Celebratory Cheers in China as 90-day Trade Truce Agreement Signed with U.S.

The 90-day tariff truce agreement between China and the U.S. has sparked jubilation in the Chinese leadership, hailing it as a diplomatic triumph. This anticipated development has stoked optimism in global markets.

While China retains strict controls on rare earth element exports, Chinese officials, state media, and social media influencers have glorified the signed trade agreement as a decisive victory for China. The official CCTV channel's social media account triumphantly revealed, "China's hardline stance and strategic countermeasures have proven highly effective."

👉 Did You Know? The trade agreement could potentially lower costs and ease supply chain constraints in high-tech sectors, such as semiconductors and rare earth elements — essential components in electronics, computing, and advanced manufacturing. Rare earth elements, primarily managed by China, are vital for manufacturing semiconductors, batteries, and other high-tech components. Lower U.S. tariffs on these materials could reduce input costs for American tech firms, helping alleviate some supply vulnerabilities.

U.S. President Donald Trump previously escalated tariffs on Chinese goods to a staggering 250%, yet the new agreement signed in Geneva slashes this rate to a still substantial 30%. In contrast, China agreed to reduce its tariffs on U.S. goods from 25% to a more manageable 10%.

Managerial bickering ensued on China's social media platform Weibo, where the hashtag "#USChinaSuspending24%TariffsWithin90Days" amassed a remarkable 420 million views, drawing attention to the 24% figure mentioned in the joint statement. One engaging post quoted, "Our forebears never knelt, so why should we succumb?" This controversial statement garnered thousands of likes.

By agreeing to lift previous restrictions on rare earth element exports, China aims to project itself as a dependable and stable trading partner. Simultaneously, the Chinese government intensifies its efforts to combat illegal smuggling of these critical materials under the guise of national security—an effort of particular importance to U.S. high-tech industries.

In a public statement the Chinese Ministry of Commerce declared it would persist in fighting against illegal rare earth element trade under the pretext of national security—resources that are deemed utterly essential for U.S. high-tech industries.

Under the agreement, China and the U.S. have pledged to institute a new "consultation mechanism" to foster regular discussions on trade and monetary policy issues.

Momentary Respite for Markets

The temporal suspension of tariffs between the U.S. and China has provided temporary relief to global markets. Consequently, numerous stock markets recorded gains on Monday.

U.S. Treasury Secretary Steven Mnuchin communicated to CNBC that, "This is an unprecedented trade victory," hinting that the two nations would start negotiations anew in a matter of weeks.

Defiant Misgivings from China

Prior to the Geneva talks, Lin Jian, spokesperson for China's Ministry of Commerce, asserted, "We will adamantly defend our legitimate gains." China's Ministry of Commerce described the agreement as "a crucial step forward," urging Washington to rectify its unilateral tariff policies.

👉 Prognostication Time! According to TS Lombard's China Research Head, Rory Green, China sees this agreement as a major victory. Green posits that the U.S. is deemed as a "capitulated" entity, prompting Washington to accept China on an equal footing. Green also forecasts that, due to China's orchestrating efforts, the 25% tariffs on $200 billion worth of Chinese goods could be dropped in the near future.

However, the U.S. administration remains hesitant to eliminate unique tariffs on semiconductors, pharmaceuticals, and high-tech sectors. Analysts speculate that these tariffs might persist for an extended duration.

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1. Despite the China-US trade truce agreement reducing tariffs in the finance sector, the ongoing tariffs on semiconductors, pharmaceuticals, and high-tech sectors indicate a prolonged challenge in the block chain and business communities.
2. As China aims to present itself as a stable trading partner in the general news and politics arena, the persistence of unique tariffs on key sectors could hinder the full-scale integration of block chain technology in the high-tech business sector.

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