Urban C. Lehner
The US-China agreement on a 90-day suspension of mutually destructive triple-digit tariffs will allow at least some trade to continue. Photo: DTN files / Chris Clayton
The United States-China agreement to reduce tariffs is undeniably a good thing. People like me who have criticized the Trump tariffs are happy to see it. But while it’s a good thing, it’s not a great thing. And it’s certainly not a triumph for the president.
It’s good because if we’d stuck to the trade-war tariffs – ours at 145% and theirs at 125% – commerce between the countries would have come to pretty much a complete halt.
At the new levels of 30% and 10%, routine commerce – including agricultural trade – will at least be possible, though still in many cases difficult. The US will instead be able to focus on ending its reliance on China for critical products it can’t currently get elsewhere. That should be goal number one.
Some trade between the countries is good, some less so. As Treasury Secretary Scott Bessent put it, the US doesn’t want “generalized decoupling” from China. It wants “strategic decoupling.”
Financial markets seemed pleased that it was the somewhat more pragmatic Bessent speaking for the administration on tariffs this time and not Peter Navarro, the White House aide who was a key figure behind the massive tariffs on China and other countries.
The deal is also a good thing because it raises hopes of further improvements in US-China trade arrangements as negotiations continue. American farmers and ranchers, for example, wouldn’t mind getting China’s tariffs and other barriers to US ag products eliminated altogether.
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