US, China agree 90-day tariff pause to continue negotiations
The US and China agreed on Monday to temporarily slash so-called reciprocal tariffs and respective countermeasures by 115% to 10%, Kallanish reports.
The announcement made in Geneva states that both countries will pause these tariffs for 90 days to continue negotiations towards “rebalancing trade.” A baseline 10% tariff rate will remain in place in both countries during the period. Other US tariffs on Chinese goods have also been retained, including the 20% rate related to fentanyl, US officials say in a press conference.
Additionally, China will suspend or remove the non-tariff countermeasures taken against the US since 2 April, which include export restrictions.
Their joint statement states that the trade talks in Geneva between China’s Vice Premier He Lifeng and US treasury secretary Scott Bessent and US trade representative Jamieson Greer created a “mechanism to continue consultations on economic and trade relations.”
The deal recognises the importance of bilateral economic and trade relations to both countries and the global economy. It also considers the need for a “sustainable, long-term and mutually beneficial economic and trade relationship.” The countries have agreed to continue advancing negotiations “in a spirit of mutual openness, continuous communication, cooperation and mutual respect.”
Bessent says that it became clear that “neither side want decoupling,” while noting Washington wants China to open for more US goods. He also indicates potential purchase agreements to help balance trade, stating that the US massive trade deficit with China stems from negligence by previous US administrations.
China’s commerce ministry notes that this round of talks has attracted great attention from the international community. Vice Premier He says Beijing is willing to work with the US to “inject more certainty and stability into the world economy.”
Other existing US tariffs on certain sectors, including a 25% tariff on cars and auto parts, remain in place. It’s unclear when a new round of talks will take place.
Analysts at ING say the trade war de-escalation is a “win-win” as it benefits both economies. Yet, they believe the agreement, “which significantly lowers tariffs without any concessions, is likely to be viewed as a particular victory for China.”
“This was a larger-than-expected de-escalation and represents an upgrade to the outlook, though the negotiation process will likely remain challenging,” they add.
UK $6 billion trade deal with Trump includes removal of steel, aluminum tariffs, reduced auto tariffs
As part of today’s estimated $6 billion trade deal with the United Kingdom, the US has agreed to drop existing 25 percent tariffs on steel and aluminum imports that went into effect March 12 as part of a worldwide tariff scheme devised by US President Trump aiming to strengthen the US domestic steel industry and protect US steel companies from ongoing steel global overcapacity and steel dumping issues.
“One of the key reasons that this deal worked with the UK is that the (US) blew up the whole international trade system,” Trump said, referring to universal reciprocal tariffs. “(Previous administrations) have been trying to get this deal done for 25 years with the UK, and it took us 45 days to get it done,” he said. “The UK was very closed to products from the US, and now it’s open.”
“That is a deal that will protect British businesses and save thousands of jobs in Britain,” UK Prime Minister Keir Starmer said in a press conference separate from today’s Trump event.
The new deal with the UK also includes actions that would nationalize British Steel, a move that could potentially lead to significant public investment, experts say. The nationalization of British Steel could help secure the company’s future, particularly the Scunthorp Steelworks, which is the last remaining UK steel plant capable of producing virgin steel.
As part of the nationalization effort for British Steel, the UK government would take over the company’s assets, liabilities and overall operations. It would also likely involve a substantial injection of public funds to stabilize the company and ensure its continued operation.
The new trade deal also includes a $10 billion Boeing procurement deal with the UK for airplane parts, while 25% tariffs on UK auto imports will drop to 10 percent for up to 100,000 vehicles. In addition to reduced steel and aluminum tariffs, steel quotas will also be reduced, though no details were immediately available.
This weekend, US officials including Treasury Secretary Scott Bessent will meet with their Chinese counterparts to de-escalate tensions over current 145 percent tariffs. Speaking of the tariffs, Trump said “They can’t get any higher… I think we’re going to have a very good weekend.”
Trump officially imposes 25% tariffs on steel, aluminium
US President Donald Trump has officially issued a blanket 25% tariff on all steel and aluminium imports to the US, Kallanish reports.
The president signed an executive order creating the tariff on Monday night. The move was expected after Trump mentioned it informally on Sunday whilst travelling to the Super Bowl football game.
“It’s a big deal,” Trump said Monday in the Oval Office. “This is the beginning of making America rich again.”
Currently, the US has postponed the 25% tariff it planned to enact against Canada and Mexico.
Kristen DiLandro USA
Trump pushes tariffs, drilling, manufacturing on Inauguration Day
Donald Trump is officially the US president again, after a dramatic Inauguration Day on Monday that included a slew of promises and day-one executive orders with potential consequences for the steel supply chain.
In his inaugural address, Trump pledged to usher in a new “golden age” and “massive restoration of America.” The 47th president said he will offer stimulus for oil and gas drilling, greater domestic auto production and upgrades to military materiel – all achievable whilst wringing more out of the nation’s trading partners.
“We will tariff and tax foreign countries to enrich our citizens,” Trump warned.
“America will be a manufacturing nation once again,” he emphasised.
Trump was set to sign formal executive orders on Monday night that include a call for federal agency reviews of trade policies including existing tariffs, the United States-Mexico-Canada Agreement and Buy America procurement rules. The initial pile of documents does not yet establish new tariffs. Nor were any international trade measures specified on the “Administration Priorities” page when the new Trump version of the whitehouse.gov website went live after his swearing-in. The list of priorities does include a pledge to resume construction of a border wall between the US and Mexico. When the prior Trump administration erected some sections of the wall, the project was a consumer of hollow structural sections.
Shortly after his victorious election in November, Trump proposed new tariffs of 25% on goods from Canada and Mexico and an additional 10% on Chinese-made items (see Kallanish 27 November). The Canadian government has included US-made steel and aluminium on its list of potential retaliatory tariffs (see Kallanish 17 January).
Unlike the Trump administration of 2017-2021 when Wilbur Ross was commerce secretary, that department will not be run by a steel-industry luminary this time. Trump’s designee for commerce secretary is Howard Lutnick, chief executive of Wall Street firm Cantor Fitzgerald. Lutnick is a supporter of tariffs and of a more aggressive adversarial geopolitical stance against China. He likely faces his Senate confirmation hearings in the next few days. Pending Lutnick’s confirmation, on Monday Trump appointed longtime Commerce deputy Jeremy Pelter as acting secretary.
In his first inaugural address in 2017, Trump never mentioned China by name. On Monday, he did so only once, as a rationale for seizing control of the Panama Canal. Trump mentioned steelmakers once in Monday’s speech, in the context of past achievements in building the US into a world power.
Peter Navarro, who served as director of the White House National Trade Council during the first Trump term, is back in the new administration as a senior counsellor for trade and manufacturing.
Late Monday, Trump signed executive orders freezing any new federal regulation and withdrawing the US from the Paris Agreement on climate. He has promised to ease regulations for the oil and gas industry and other corporate interests and to cut corporate taxes.
Dom Yanchunas USA
Biden administration unveils its final Buy America guidance
US President Joe Biden’s administration has published its final “Build America Buy America” guidance in order to help federal and state agencies fully take advantage of funding being granted through the Bipartisan Infrastructure Law.
Kallanish understands that the Office of Management and Budget (OMB) has issued a revision to Title II of the code of federal regulations (2 CFR). This revision includes the addition of a new amendment to the code, section 184, intending to define key terms that pertain to iron/steel products.
In 2 CFR section 184, OMB explains that materials incorporated in infrastructure projects must meet the Buy America preferences for only a single category in which the materials are classified. This means that, in the case of iron and steel products, there is no restriction on the place of manufacturing for components or subcomponents that do not consist of iron or steel.
“The final guidance will support implementation of the Bipartisan Infrastructure Law’s (BIL) statutory requirements that manufactured products, construction materials, and iron and steel used in federally funded infrastructure projects are made in America,” explains Livia Shmavonian, the Biden administration’s Made in America director.
Zach Johnson USA