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| Tariffs have fallen for now, but enough to maintain relations? |
After two days of talks in Geneva, China and the United States have backed down on their tariff brinkmanship -- for 90 days.
US President Donald Trump had imposed a whopping 145 percent tariff on Chinese goods which caused small and large businesses to cancel orders from China, and so China reciprocated with 125 percent tariffs on American goods.
Perhaps the outcry from the business community concerned about having no inventory for Christmas spurred the Trump administration to finally hold talks with China, because Chinese leader Xi Jinping was very willing to patiently wait for Trump to cave in.
Now the tariffs have dropped to 30 percent on Chinese goods, and 10 percent for American, but is that enough to get businesses moving again? Many believe a rise of 10 percent would be the threshold, so 30 percent may not cut it.
Businesses should be placing their Christmas orders now, but waiting to see what happens after 90 days still leaves uncertainty in the market.
That probably explains why stocks rose at first, but then in Asia, they fell slightly.
Even though the US is claiming this is a win, Xi is hinting it may end badly.
"Bullying or hegemonism only leads to self-isolation," he told Chinese and Latin American officials.
To be continued!
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