Daily us Times, Washington: The US and China reached a preliminary trade agreement which will result in billions of dollars in tariffs removed or delayed.
The so-called phase one deal puts the US stocks hit a fresh record on hopes that the long going trade tension between these two nations will be continued softening.
A fresh wave of US tariffs on Chinese goods was due to take effect on Sunday. It is cancelled now under the deal. If the deal was not reached, the Chinese made smartphones, toys and clothing would have become more expensive for Americans during this Christmas season.
US President Donald Trump said in a tweet ‘We will begin negotiations on the phase two deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all.’
It is reported that the US is offering to reduce tariffs on Chinese goods significantly, worth about 360 billions of dollars. In return, China will buy large quantities of soybeans poultry and other agricultural products from US.
The agreement is a deal in principle, which means if China breaks any part of the deal, the US has the ability to re-implement tariffs.
The new tariff off deal seems a festive cheer for American shoppers and business because if the new tariffs hit, it will cost Christmas decorations, game consoles and iPhones 15% more.
85% of these goods come to America from China. That large volume of import from one single country made it difficult Christmas decorations, game consoles and iPhones.
US-China trade war has been ongoing for the last two years, and it affects the world economy. The International Monetary Fund (IMF) predicts the trade war between the world’s two biggest economies shave almost a percentage point off of global growth this year.