White smoke on trade deals calms markets and offers 'off-ramp' to Trump
US trade representative Jamieson Greer, left, and US treasury secretary Scott Bessent discuss details of the tariff pause with China. Both the US and China are now looking to undo the damage of the tit-for-tat trade war. Picture: Jean-Christophe Bott/Keystone via AP
Despite warnings that the impact of US tariffs would hit the US economy hardest, the US Federal Reserve sat on its hands last week, using the cover of uncertainty on the outlook to continue its pause on interest rates. However, some clarity is now starting to emerge, with the US agreeing a significant deescalation in tariffs with China, following a framework deal with the UK last week.
The takeaway from these recent developments is that both the US and China are now looking to undo the damage of the tit-for-tat trade war, which was already beginning to be felt in both economies in recent weeks.
