The US is considering cutting tariffs on Chinese goods by up to half, but CNBC sources say this would only happen if Beijing also lowers its trade barriers.
Reuters quoted a source as saying that a senior White House official said tariffs on Chinese goods could be cut from 145% to around 50-60%. The US government is also considering a group tariff option, similar to a proposal from the House of Representatives late last year. That is, to impose a 35% tariff on goods that the US considers not a threat to national security, and at least 100% on goods considered strategically important to US interests. The bill proposes to apply the tariff for five years.
However, the source said that US President Donald Trump has not yet made a final decision. Discussions are still ongoing, and many different options are being considered.
On CNBC, a White House official said that tax reductions would have to be bilateral, meaning China would also have to reduce trade barriers.
At the opening of the trading session on April 23, key indexes of the US stock market soared. DJIA increased by 1,088 points, equivalent to 2.8%. The S&P 500 is currently up 3.2% and the Nasdaq Composite is up 4.4%.
Investors are optimistic as US-China trade tensions show signs of cooling down, and President Trump announced that he has no intention of firing Fed Chairman Jerome Powell.
Meanwhile, the above news has caused world gold prices to plummet. Currently, each ounce has decreased by 90 USD to 3,288 USD. Previously, the price was close to 3,260 USD.
On April 22, Mr. Trump said that the current import tax rate on all Chinese goods could be reduced significantly if the two sides reached a trade agreement. However, this tax will not be adjusted to zero. This move was welcomed by investors, in the context of the US-China trade tensions that have continuously escalated in recent times.
On April 23, China also signaled its openness to trade negotiations with the US. However, the country also warned that it would not negotiate under the threat of the White House.
The fact that both sides showed their readiness to reach an agreement marks a change from earlier this month. Previously, the world's two largest economies continuously responded to each other with tax hikes and tense rhetoric, causing global stock markets to experience their worst week in many years.
After many rounds of tariffs, the total US import tax applied to all Chinese goods has now reached 145%. Some products are even subject to 245%. China also responded with a 125% tax on US goods, tightened the export of many important minerals and blacklisted many US companies.
(according to WSJ, Reuters, CNBC)