FT News Briefing A sigh of relief on US-China tariffs
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May 13, 2025 Global stocks are on the rise thanks to a temporary tariff reduction between the US and China. This diplomatic move is expected to ease trade tensions and benefit American businesses. Meanwhile, the EU is gearing up to impose capital controls and tariffs on Russia, intensifying economic pressure. In the tech world, OpenAI and Microsoft are renegotiating their billion-dollar partnership, facing challenges related to funding and competitiveness. These discussions could reshape the landscape of AI and corporate strategies.
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US-China Temporary Tariff Ceasefire
- The US and China mutually agreed to reduce tariffs for 90 days, easing trade tensions temporarily.
- This tariff ceasefire is a significant cooling off in the US-China trade war era.
Rationale Behind Tariff Reduction
- The tariff reduction decision came after high-level US-China talks aiming to pull trade war back from extreme tensions.
- Both sides recognize they do not want to decouple their economies despite ongoing trade conflicts.
Impact of High Tariffs on Businesses
- Lower tariffs give US businesses importing from China some breathing room amid supply chain disruptions.
- Extremely high tariffs nearly halted all trade, which was detrimental to US supply chains and business.