Three cheers for the US-China trade war ceasefire
Yay! High-level US-China talks in London this week reached a trade-war ceasefire, offering some stability for nervous markets.
Days of talks, following on President Donald Trump's call with China's Xi Jinping last Thursday, settled on a framework that leaves a 55% US tariff on Chinese goods and a 10% Chinese levy on American imports.
Plus, Beijing will ease restrictions on rare-earth exports while Washington will back off on its developing ban on Chinese students attending American universities.
Plenty of issues remain: China's key role in world fentanyl production, for one thing; its long history of intellectual-property theft, currency manipulation and so on.
Not to mention the outright espionage that so many of those students are dragged into.
And of course in the longer term the United States needs to be less dependent on China for rare earths, pharmaceutical precursors and many other critical needs.
The two sides are supposed to reach a comprehensive deal by Aug. 10, but at least the summer should be calm.
The chaos of on-again, off-again tariffs had led to turbulence in US markets and had mom-and-pop shops bracing for 'the end'; now they can plan at least a couple of months ahead, with solid reason to hope the worst is over.
US businesses can adapt to 55% tariffs on Chinese goods, as long as they've got some certainty that the rate will remain stable.
Kudos to Treasury and Commerce Secretaries Scott Bessent and Howard Lutnick, the top US negotiators in London, for mastering 'the art of the framework'; let's hope Trump and Xi can close a final deal.
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