The US and China have agreed to a trade agreement. This first phase of the trade deal which was being speculated for a long time will be coming shortly this month. During this phase, both the Americans and the Chinese will remove or relax tariffs on the various items.
The stock market in the US jumped to fresh highs over the expectations of a trade deal between the two biggest economies of the world.
The Trump administrations had previously sought to apply fresh tariffs on a number of Chinese goods. But that has been cancelled for now. Had the tariffs been applied it would have meant goods such as smartphones, clothing, and toys would have become costlier due to the tariffs just before Christmas Eve.
US President Mr Trump announced the news through a tweet that the second phase of the trade deal starts before the Presidential elections in the US.
According to reports, the US authorities are expected to reduce tariffs of an amount close to $360billion worth of imported Chinese goods. In return, China will buy soybeans, poultry and agricultural products from the US.
The deal is a negotiation from both sides and if one party breaks the promises stated within the agreement the other party has the right to reinstate the tariffs.
The retail shoppers and the wholesalers in America can breathe lightly for now before Christmas as iPhone, game consoles and decorating items were to be hit by a 15% tariff which has been revoked now.
Almost 85% of these goods will be coming from China and had the tariffs been set it would have made it difficult for the people on the US to buy these items.
The first part of the trade deal is just the beginning. America imports about $550 billion worth of Chinese goods. The remaining $370 billion worth of goods will continue to remain under the existing tariffs.
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