China suspended tariffs on American goods that were supposed to take effect on Sunday. This announcement followed an agreement for a tentative deal last week that is now dubbed as the "phase one deal."
Specifically, tariffs are officially suspended for American goods that include corn, and US-made cars and auto parts. The suspension was detailed in an official statement from China's State Council's Customs Tariff commission. On the other hand, existing tariffs will remain in effect. This has also been the decision made by the US Trade Representatives.
The positive development came as trade negotiators from the world's two largest economies agreed on a phase one deal which provisions remained vague at present.
While both parties chose to release details of the phase one deal in tranches, many market and political experts said that this has been the most peaceful the two conflicting nations have become in the past year.
Relations between the world's two largest economies sank in July 2018, when US President Donald Trump imposed paralyzing tariffs on Chinese goods based on baseless accusations that the Asian country is guilty of unfair trade practices.
Trump has always been vocal about his hard stance against China even before he runs for the presidency. In September 2011, he made a heavily-charged tweet saying China is neither an ally or a friend. This was just among the many that followed later.
In May 2016, Trump started his campaign for the Republican Party. His strong objections about China had always been sounded off in his election speeches. His allegations against the Asian powerhouse had been stronger each time.
There had been heavily-loaded statements made against each other by China and the US. As their tit-for-tat lingers, with neither Trump of Chinese President Xi Jinping willing to back down, a full-blown trade war took place and many businesses were caught in the middle.
Ahead of the phase one deal last week, The U.S. has placed tariffs on $550 billion worth of Chinese products in total. At the same time, China has put levies on $185 billion worth of U.S. goods.
The phase one deal is welcome news for the world's markets as they feared a complete shutdown when China won WTO case in November against the U.S. At the time, WTO ruled that China can impose compensatory sanctions on American goods worth $3.6 billion. The U.S. was found guilty of failure to abide by anti-dumping rules on Chinese products.
Currently, both parties were reportedly talking about moving on to the phase 2 deal.
