theglobeandmail.com
US-China Tariff Deal: Market Surge Masks Higher Baseline Tariffs
The US and China have announced a significant reduction in tariffs, causing a market surge, but the US maintains a 10 percent baseline tariff, significantly higher than historical and global averages; the long-term impact on global trade and US relationships remains uncertain.
- How does the current US tariff policy compare to pre-2025 levels and international norms?
- This tariff reduction follows a similar agreement between the US and Britain. However, the US still maintains a 10 percent baseline tariff on most imports, significantly higher than pre-2025 levels and global averages. The current average US tariff is 17.8 percent, compared to 1.37 percent in Canada and 1 percent in Britain.
- What are the immediate economic consequences of the US and China's tariff reduction agreement?
- Following a recent agreement, the US and China have significantly reduced tariffs on each other's goods, causing the S&P 500 index to surge over 3 percent. This marks a de-escalation in President Trump's trade war and a market rebound, exceeding pre-April 2 levels.
- What are the potential long-term implications of the US's new tariff approach for global trade agreements and its relationships with key allies?
- The US's move suggests a shift towards higher tariffs as a baseline policy. The 10 percent tariff is described as a 'floor' by officials, implying further tariff increases are possible. The USMCA's future and Canada's trade relations with the US remain uncertain.
Cognitive Concepts
Framing Bias
The article frames the narrative around the negative consequences of Trump's trade policies. The headline and introduction highlight the market's initial positive reaction to tariff reductions, but quickly shift to a critical assessment of the overall impact and lasting effects of the policies. The use of terms like "dystopian Price is Right" and "vertiginous 145 per cent" creates a negative and alarmist tone. The repeated comparisons to pre-2025 tariff levels further emphasizes the negative deviation from the past.
Language Bias
The article uses loaded language to portray Trump's trade policies negatively. Terms like "dystopian Price is Right," "vertiginous," "embargo," and "honking minus sign" convey strong negative connotations. The repeated emphasis on high tariff percentages amplifies the negative impact. More neutral alternatives could be used, such as 'significant tariffs' instead of 'vertiginous tariffs'.
Bias by Omission
The article focuses heavily on the negative impacts of Trump's trade policies and the resulting high tariffs, but it omits discussion of any potential benefits or positive consequences of these policies. It also doesn't explore perspectives from businesses or individuals who may have supported the tariffs or believe they had positive impacts. The lack of counterarguments weakens the overall analysis.
False Dichotomy
The article presents a false dichotomy by portraying the situation as a simple choice between "low tariffs" and "high tariffs," ignoring the complex nuances of trade policy and the various factors influencing tariff levels. It oversimplifies the situation and fails to acknowledge the potential for other approaches or intermediate levels of tariffs.
Sustainable Development Goals
The imposition of high tariffs by the Trump administration led to trade wars, impacting economic growth and potentially leading to job losses in sectors affected by tariffs. The article highlights significant increases in tariff rates, disrupting established trade relationships and negatively affecting economic stability.