The US-China trade war has temporarily cooled as both countries agreed on Monday (May 12) to reduce previously imposed high tariffs by up to 11.5% over the next 90 days, following their first formal trade talks in Geneva. SMU Associate Professor of Finance Fu Fangjian noted that the scale of US concessions exceeded expectations. Tariffs have largely returned to pre-April 2 "Liberation Day" levels, except for the initial 34% reciprocal tariffs on Chinese goods, of which 10% remains. He attributed the concessions to China's strong countermeasures, firm stance, and rising domestic political pressure in the US, as well as difficulties in negotiating with allies. This suggest the US is not genuinely aiming to decouple from Chian economically.
