US Donald Trump’s trade war with China would likely see global businesses reshore back to the Asian giant even as Washington and Beijing have extended a tariff truce for another 90 days, an analyst said on Tuesday (August 12).

The United States and China on Monday (August 11) extended a tariff truce for another 90 days, staving off triple-digit duties on each other's goods as U.S. retailers get ready to ramp up inventories ahead of the critical end-of-year holiday season.

China managing director at The Asia Group Han Shen Lin expected the two superpowers would continue to have an extension until Xi and Trump meet one-on-one.

"If you're looking at it purely from a cost standpoint, looking at it from the ability to create new products rapidly at a cheaper cost, then the appeal of China is going to start looking stronger over time in a world where every country is facing higher and higher tariffs and greater uncertainty," Han said.

The new order prevents U.S. tariffs on Chinese goods from shooting up to 145%, while Chinese tariffs on U.S. goods were set to hit 125% - rates that would have resulted in a virtual trade embargo between the two countries. It locks in place - at least for now - a 30% tariff on Chinese imports, with Chinese duties on U.S. imports at 10%.

Source: AWANI International

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