On December 12, the US and China jointly announced that they would significantly reduce the punitive tariffs imposed on each other within the next 90 days. The US will cut tariffs on Chinese imports from 145% to 30%, while China will reduce tariffs on US imports from 125% to 10%. This move seems to inject a dose of enthusiasm into the global market.

Len Hsien-Ming, president of the National Chengchi University, pointed out that while China may feel victorious in the tariff battle, it shouldn’t celebrate too early. He noted on Facebook that the temporary ceasefire in the US-China tariff war came earlier than expected. He emphasized that the economic impact of the trade conflict has been more severe for China, especially concerning unemployment, while the political repercussions for the US have been more significant, as Trump's approval ratings have dropped.

Hsien-Ming further stated that despite Trump's reluctance to relent publicly, the volatility in the US stock market, bonds, and dollar since the onset of the tariff war has posed a considerable challenge to the Trump administration. Many economists have warned that tariffs could lead to price increases, though economists aligned with Trump contend that businesses will absorb these tariffs instead.

Moreover, he pointed out that Trump’s frequent statements claiming that “there is no inflation in America” and the dramatic reactions following the imposition of tariffs on companies like Amazon indicate his heightened concern over the impact of tariffs on prices. Hsien-Ming stressed that the current situation merely reflects a return to pre-equivalent tariff conditions, allowing all countries a 90-day buffer period to negotiate future tariff rates.

If the negotiation process does not proceed as expected, Trump may initiate a new wave of US-China tariff confrontation, similar to his first term. He mentioned that the current effective tariff on China has dropped from 125% to 10%, but the additional 20% tariff Trump has maintained against China on the grounds of fentanyl still applies. Hence, during his second term, it is likely to increase to 30%, not accounting for various tariffs imposed on specific industries (steel, aluminum, automobiles, etc.). He concluded that the combined tariff rate on Chinese goods could effectively be around 50%, contrary to the widely claimed 30% rate.