America has given China a strangely good tariff deal

AFTER a busy weekend of talks in Geneva, an impatient reporter asked when the results would be announced. Li Chenggang, China’s trade representative, replied with a smile and an old saying: “Good food is never too late.”

The dish, when it at last arrived on May 12, was surprisingly tasty. America has agreed to cut the “reciprocal” tariffs it imposed on China last month from 125 per cent to a more digestible 10 per cent for at least 90 days. China has agreed to do the same. It has also agreed to roll back other retaliatory measures, such as restrictions on sales of rare-earth minerals.

Earlier tariffs that each country has imposed will remain. They include an American levy of 20 per cent that Donald Trump introduced to punish China for making the ingredients of fentanyl, a synthetic opioid. The result is a combination of tariffs that are far higher than Trump inherited when he returned to office in January but much lower than seemed likely a few weeks ago, when Trump was admonishing China for a “lack of respect” and China was digging in for a protracted trade war. Over the next 90 days China will face a 10 per cent reciprocal tariff like everyone else, even though it was the only country that dared to defy America.