Earlier this week, U.S. and Chinese trade negotiators concluded two days of talks in Geneva and announced that they had agreed to suspend additional tariffs for 90 days, with both sides reducing tariffs by 115%.
It seems that the market prevailed, as the Nikkei stock average closed at its highest level in over a month the following day. In Japan, critics say that the administration of Donald Trump “initiated a game of chicken and then hit the brakes itself,” and that “even if stock prices recover, international credibility will not be easily restored.”
However, the U.S. administration's high tariff policy represents a political dispute with China, which is fundamentally different from questions of “international credibility” in trade. Critics are right that the U.S. started the tariff war, but once its economic damage became clear, Washington had little choice but to pull back.
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