Ryan Lynch, a financial advisor at UBS, and Michael Lee, founder of Michael Lee Strategy, are analyzing how the market is reacting to international negotiations and economic indicators this week.
On Monday, President Donald Trump announced an agreement with China to temporarily reduce tariffs. However, the two parties are still finalizing a more comprehensive deal, which aims to open up the Chinese market to U.S. companies.
“The primary focus of our discussions is how to open up China. They’ve agreed to it, but formalizing this is going to take some time, which is not exactly straightforward,” Trump stated.
“If we can gain access to China and compete effectively, I think it would be fantastic for our businesses,” he continued. “This is a lot of work for China, and it seems like it’s about time for them to be able to utilize their workforce appropriately, and that’s what’s on the table.”
Trump elaborated that increasing market access for U.S. businesses in China is part of his administration’s goal to recalibrate the trade balance between the two nations, which includes tackling non-tariff barriers.
U.S. and China announce plans to cut 90-day tariffs in trade negotiations
“We’ve opened up our market to China, yet they maintained many restrictions while not allowing us access in return. That just didn’t sit well with me. It’s not equitable. They’ve agreed to fully open China, which I believe is beneficial for both nations,” he said.
“China will also suspend and lift all non-financial barriers. They’ve acknowledged that… there are numerous issues,” Trump added.
Trump aims to leverage U.S. economic power to enhance access for exporters in China
The President noted that the “mutual” tariffs discussed during the Liberation Day event at the White House would decrease from 125% to 10%. The overall reduction in tariffs on Chinese imports will drop from 145% to 30% across the 90-day timeframe, while China’s tariffs will also see similar reductions.
“Yesterday marked a full reset with China. Following constructive discussions in Geneva, both parties consented to lowering tariffs that have been in place for 90 days since April 2, while we continue to negotiate on significant structural matters,” he said.
“This won’t affect existing customs duties or additional fees on items like vehicles, aluminum, or pharmaceuticals; we still want to bring drug manufacturing back to the U.S.,” he clarified.
Trump claims tariffs are driving U.S. investment while negatively impacting China
Trump described the trade discussions as “very amicable,” emphasizing the strengthening of relations with China, asserting that this deal would be advantageous for the U.S. economy.
“Our relationship is very positive. We are not out to cause harm to China. They are indeed struggling significantly, facing factory closures and widespread anxiety, and they are eager to move forward with us,” he remarked.
He also mentioned that China had not adhered to the “Phase 1” trade agreement established during his initial term.
U.S. must address China’s non-compliance with prior agreements, says Treasury Secretary
Treasury Secretary Scott Bescent expressed similar concerns on Fox Business Network’s “Kudlow” last month, stressing that the U.S. needs to take into account China’s failure to comply with the Phase 1 agreement.
