New step in Trump's truce with China: he lowers tariffs on small packages

BarcelonaThe United States has taken a new step in the de-escalation of the trade war with China, which began with talks last weekend in Geneva and was finalized on Monday with a mutual tariff reduction for 90 days. The Donald Trump administration has decided to reduce tariffs on small packages imported from China from 120% to 54% starting Wednesday. This measure gives breathing space to large Chinese e-commerce giants such as Shein and Temu.

The day after Washington and Beijing agreed to a pause in the trade war, the White House made a new gesture toward the Asian giant by ordering a reduction to 54% of "minimum" tariffs on imports valued at less than $800, with a minimum flat rate of $100. Chinese companies like Shein and Temu took advantage of a legal loophole to export tariff-free to the US until US President Donald Trump announced a 120% tax in February and a tariff of up to $200 starting in June. Now the Republican president is backtracking again and reducing these rates by more than half.

After a weekend of negotiations in Geneva, the United States and China agreed on Monday to a 90-day pause in the trade war between the two powers. Both sides pledged to substantially reduce their reciprocal tariffs by 115 percentage points. The agreement did not mention "minimal" tariffs, but the White House has also opted to lower them.

Trump plans to speak with Chinese President Xi Jinping later this week, he said Monday, and is pointing to a de-escalation of the trade conflict. He has already ruled out raising tariffs to 145% again, although he warned that he could raise them "substantially" again.

The US president declared a trade war on a large part of his trading partners, announcing tariffs of over 20% on dozens of countries in April and raising them to 145% in China. Pushed by the turbulence in the bond market, Trump has reversed his radical protectionist policy with a pause on the highest tariffs. However, he maintains the 10% tariffs on virtually all imported products, as well as the 25% tax on cars, steel, and aluminum, except for the United Kingdom, with whom he closed a preliminary trade agreement last week.

This retreat by Trump from his aggressive trade policy has boosted the stock markets, especially in the United States, has revalued the dollar, which was losing value against most currencies, especially the euro, and has boosted the price of oil, which was falling due to the fear of one.