On Wednesday, US Treasury Secretary, Scott Besent, crossed the lines to discuss the ‘commercial war’ between China and his country. He commented that Trump has not offered unilaterally reducing tariffs to China. Besent added: “As I said many times, I do not think that any of the parties believes that the current levels of tariffs are sustainable, so I would not be surprised if they went down mutually.”
Besent added that it does not have a temporary frame to start a discussion with China, although “it will have to be carried out at lower levels than Trump and XI.”
Reaction of the markets to Besent’s comments
US actions fell after these comments, with the mood of the market becoming slightly negative. The S&P 500 fell from the maximum daily A below 5,400 near its opening price. Meanwhile, the American dollar index (DXY), which tracks the yield of the dollar against a basket of six currencies, reduced some of its previous losses, placing about 99.61 practically unchanged.
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
