We Have A Deal!
We have a deal! Though we are all overwhelmed by the ever-adapting news of tariffs, there is positive news of a trade deal with China, along with progress on other deals that occurred earlier in the week including Japan, Vietnam, Cambodia. We expect India is just around the corner. Details below.
CHINA Trade Deal: Today, President Trump held talks with China’s Xi Jinping for the first time in many years in South Korea. We received positive news at the conclusion, indicating a short-term pause in the ongoing trade war with China. Facts available at this time include:
-One year pause by China on Rare Earth Export controls
-US to cut fentanyl tariffs on China from 20% to 10% immediately, and avoid other outlandishly high tariffs that have been threatened in recent months. This reduces overall tariffs on China to around 47%. He had previously threatened an additional 100% on China effective November 1.
“We have a deal” Trump said. “Now, every year we’ll renegotiate the deal, but I think the deal will go on for a long time, long beyond the year. But all the rare earth has been settled, and that’s for the world.”
JAPAN Trade Deal: On October 28th, after meeting with Japan’s first female Prime Minister, Sanae Takaichi, President Trump announced a critical trade deal with Japan. This included the advancement of a $550 billion investment commitment to the U.S. for defense systems and for the U.S. industrial base. Also, signing of a critical landmark minerals agreement, U.S. energy agreement and joint cooperation on illegal drug trafficking.
The bit on minerals ties in to President Trumps’ leverage-building project to create strength ahead of his meeting today with China’s President Xi Jinping this week. Japan joins a group of six countries now collectively part of critical sourcing of rare earths, a key resource China has maintained stronghold over.
This brings Japan’s reciprocal tariff rate down from 25% to 15%.
INDIA Trade Deal: On Wednesday, Trump offered signs of an imminent trade deal with India. He signaled that the provisional agreement has been complete and is awaiting his final approval. If announced, we expect the current 50% tariff will be reduced to 15%, and India will have successfully avoided punitive tariffs in excess of 100%, which was threatened earlier this month. We are following developments on this closely.
VIETNAM Trade Deal: According to the White House, we have reached a permanent 20% trade deal with Vietnam, with a following process to identify specific products that will receive 0% reciprocal tariff. Negotiations are to continue over the next two weeks.
THAILAND Trade Deal: It is reported that U.S. has reached a trade deal with Thailand, via a fact sheet from the Office of the US Trade representative. If finalized, the U.S. intends to maintain a 19% reciprocal tariff rate, as well as identifying certain products subject to 0%.
CAMBODIA Trade Deal: Per the Office of the US TR, the U.S. has reached a deal with Cambodia that will not exceed a 19% reciprocal tariff rate. The intent is to establish a new rate, no higher than 19%. The U.S. will also identify products for a 0% rate.
As outlined, most deals being finalized still include some form of a reciprocal tariff. Meanwhile, the U.S. Senate voted today to strike down Trump’s reciprocal tariffs. This is the third vote to pass this week, though Congress requires the House to approve which is unlikely to happen.
The Supreme Court begins opening comments for the hearing against IEEPA (Reciprocal) tariffs on November 6th.
