Washington and Beijing have agreed to lower tariffs in a 90-day Trade War de-escalation deal.
U.S duties on Chinese goods will drop from 145% to 30%, while China cuts tariffs on U.S imports from 125% to 10%.
The trade war had pushed both economies toward a standoff - now the clock’s ticking: 90 days to turn this truce into a lasting deal.
It is important to realize that this agreement does NOT fill the product gap which developed when shipments from China stopped between April 2, right through to May 11. That means there is already a supply-chain "gap" wherein almost nothing was shipped from China.
Since the shipments from China generally move by ocean containerized freight, the earliest the US will see __any__ shipments from mainland China from __this__ deal, is about 30 days from now.
Worse, that is contingent on China factories having remained open and operating during this massive Trade War. MANY factories in China had to lay-off workers. Others went completely out of business when US orders canceled, taking 30-40% of their business away, overnight.
So the supply chain has taken a sudden and dramatic hit. There will be some shortages. There will be some product outages, for at least a month.
And this deal is only valid for 90-days. So the whole thing can start all over again at that point.
We're in for quite a ride.
