After the US and China agreed to a temporary truce in their ongoing trade war, President Trump is expected to claim victory despite market reactions suggesting otherwise. Tariffs on Chinese goods will decrease significantly, but the deal does not revert to previous norms. With ongoing dialogues and some concessions, it's clear the trade dynamics have shifted, although this agreement appears more like a capitulation than a definitive success. Market concerns about potential shortages may have influenced Trump's decision to moderate his trade stance.
Donald Trump will undoubtedly proclaim the temporary truce in the US-China trade war as a victory, but the markets view it as a capitulation.
The agreement allows for a reduction in tariffs on Chinese goods from 145% to 30% for an initial 90-day period, marking a significant shift.
Despite the tariff cuts, the US still fell short of a full trade normalization compared to what existed before Trump's presidency.
Warnings from retailers about potential shortages may have shifted the balance towards trade moderates in Trump's administration, prompting this unexpected compromise.
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