“We’re going to fix the global economy, and the US is going to be a big manufacturing hub,” said the Geneva Trade Platform Executive Director

“Are we going to fix the global economy in a way that China is a big manufacturing hub and the US a consumption economy?” The executive director of the Geneva Trade Platform said “no” when asked if he thought so. Is there anything that the two sides can do to make each other happy? Sure, there must be.

The stock market is going up after the two countries agreed to slash their tariffs for 90 days. The tax on Chinese imports to the U.S. will drop from 145% to 30% while the tariff China charges on U.S. goods will fall from 125% to 10%.

The European Union Chamber of Commerce in China is encouraged by the decision, but is still uncertain. Businesses need predictability to make decisions.

GENEVA — The U.S. and China have agreed to significantly reduce tariffs imposed just weeks before on each other’s goods, after negotiators from both countries met over the weekend for trade talks in Switzerland, adding yet another dramatic turn in a dispute that has roiled financial markets and rocked the global economy in recent weeks.

“Neither side wants a decoupling,” said Bessent “We do want trade, we want more balanced trade, and I think both sides are committed to achieving that.”

The two countries made rapid progress this week and agreed to set up a consultation mechanism as part of addressing trade issues going forward.

American levies on Chinese goods will drop from at least 145% to a base levy of 30% for an initial period of 90 days, while Chinese levies are set to fall from at least 125% to 10% on American goods.

The US side was led by Treasury Secretary Scott Bessent while the Chinese side was led by Vice premier He Lifeng.

“We concluded that we have shared interest and we both have an interest in balanced trade,” Bessent said at a press conference on Monday. Greer also said there was a “positive path forward” on the two countries working to address fentanyl smuggling.

A diplomat with China’s commerce ministry says that if a deal is reached, it will be by the development of China’s own interests.

The atmosphere of the meeting was “candid, in-depth and constructive” according to the Vice PM, who described it at a press conference after the meeting.

The U.S.-China Trade Connection after the Decreasing of Triple-Circle Tariffs on March 21st

Stocks opened sharply higher Monday after the U.S. and China announced a temporary break from triple-digit tariffs that had brought much of the trade between the two countries to a standstill in recent weeks.

Many businesses stopped imports to avoid paying a triple-digit tax. The Port of Los Angeles saw a decline in cargo traffic last week, and there is a risk of supply shortages in the near future.

When the 145% tariffs tookeffect, Ross removed two containers from ships in China. Now she’s scrambling to get as much merchandise to the U.S. as she can while the lower tariffs are in place.

After learning of the deal at 4:30 am, Jayinformed his associates in Hong Kong to begin scheduling shipments.

“We’ve been holding everything at the factories and at the ports, because we didn’t want risk putting anything on containers with a 145% tariff,” Foreman says.

Some businesses may race to produce and ship products early for the Christmas holiday season to avoid the risk of higher tariffs in the fall. But that’s also a gamble, Foreman says, because it’s possible the administration will order lower tariffs at the end of the three-month window.

“Right now, I’m just trying to get through the next four to six weeks,” he says. “Whether I double-shift the factories to try to get more produced and out the door before the end of the 90 days, I’ll probably need another three to four weeks to figure that out.”

President Trump’s 90 Day Trade Agreement and the U.S. Supply Chain: Implications for Stagflation and Higher Uncertainty

President Trump paused tariff hikes on other countries in early April for 90 days, saying more than 75 countries had reached out about seeking deals with the U.S. Some of those tariffs could resume in early July.

Swonk said it will be difficult for the Trump administration to negotiate 90 agreements in 90 days with other countries, and that they have very tentative rules about how they will be implemented.

Swonk said that the last time the US experienced stagflation was in the 70s. During that time, oil prices spiked, as did the cost of goods and Americans accepted high inflation as a part of life.

“And it’s not just a one-time event because of the layered nature and the unevenness [with] which tariffs have been applied,” Swonk said. It is a multiple time event that is causing the supply chain disruptions we are seeing right now.

The Federal Reserve is worried about this combination, Swonk said. The Federal Reserve voted earlier this month to keep interest rates steady, citing concerns about economic uncertainty and the risks of higher unemployment and higher inflation.

The past 40 days have resulted in a paralysis on import of goods, and now there is a rush to bring them in. Those two factors, she added, can make for stagflation, a period during which the economy experiences higher costs for goods, higher unemployment and slower economic growth.

The same thing happened when a lot of freight shipment fees went up after the Pandemic, which was an additional cost in addition to the tariffs.

How much do U.S. Stop-Go Programs cost? Diane Swonk tells the Foreman: “Everyone’s got to take a little bit longer,” she adds

“Stop-go programs are the things that can make for very big policy mistakes because of how inflation impacts the U.S. economy,” Swonk said.

She added that it will take time for goods released in response to the lower tariffs to reach the U.S. market, so shoppers could still see some empty store shelves.

“Everyone all of a sudden slows down to a crawl to try to creep across the stoplight, not knowing which person’s supposed to go next,” Swonk said. Some opt out entirely and do a U-Turn, waiting for traffic to clear, or the stop light to be fixed.

The stock prices soared after the deal was announced. Uncertainty will continue to affect the U.S. economy and it will be a factor, Diane Swonk said.

The man is called a Foreman. The president said everybody’s got to endure some short-term pain for some long-term gain. So our feeling is that everybody in the supply chain is going to be willing to take a bit of the burden of this. Consumers will pay a little bit more. A smaller margin is what the retailer will take. We’ll take a little bit of a smaller margin. And the China factory will be there. And if everybody gets together and shares the burden, everybody will feel a little pinch, but not a huge pinch. But if the consumer, and the administration, and the retailers try to put this burden just on a manufacturer like myself and try to expect us to eat the entire 30% tariff, then you’re going to have a lot of problems with businesses because none of us have these kinds of profit margins. It has to be something similar to buying war bonds when it was a thing, that everyone would have to help out. We’ll see if this all works. The jury’s out and it’ll come in on November 2026. And we’ll see whether this policy is right or wrong.

“I received the news about 4:30 in the morning,” he said. “I literally jumped out of bed, called my factories in China, and started booking trucks and containers. My operations team reminded me that it wasn’t just a flip of a switch.

He said that they can be in business. If manufacturers like us shoulder the entire burden, we’re in trouble. Everyone — retailers, factories, and consumers — needs to share the pain.”

He estimates retail prices could rise 10% to 15%, if everyone in the supply chain absorbs part of the cost. Otherwise, companies with slim margins won’t survive.

The holiday sales season is crucial for toymakers and at the height of the uncertainty, it was feared that his shelves would be empty. But Foreman remains cautious. The resulting confusion could paralyze the market if the administration reverses course again.

While speaking with NPR’sMichel Martin, he explained how changing U.S and China trade policies are impacting his business and the economy.

Martin: 30% is much better than 145%. But you were telling me that it’s like drinking spoiled milk instead of poison. Very vivid imagery, by the way. Why do you say that?

Martin: But you were really worried that you might actually not have anything to sell at Christmas. Which, frankly, let’s just be honest, would have shut you down, right?

Foreman’s Experiment: Christmas in Switzerland, and what can the president’s government tell us about the world’s finances?

The person is the Foreman. Oh, for sure. I would have been out of business, and there would be a shortage of merchandise for the holiday season because of the 145% tariffs. The 30% moves things along. You’re likely to see prices increase, if everybody takes their part, about 10 to 15%. The market will be able to absorb unemployment if the stock market stays high and the stock market remains stagnant at a reasonable level. And things will kind of move on. And we’ll, again, see whether the president’s experiment works or not.

He said, “Foreman.” It is chaos for everyone again, if he makes another U-turn. And this is where they’ve got to sort of settle down. We were fortunate and the team went to Switzerland to do this. There is still a team that is working with many other markets. The president can throw a grenade in the middle of this. They have just got to allow people to do business this year, and settle down. And let’s have Christmas.