The state of U.S.-China trade

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Kai Ryssdal (1:01)

Oh, look, trade and tariffs back in the news. From American public media, this is Marketplace.

In Los Angeles, I'm Kai Ryssdal, Monday, today, 21 September. Good as it always is to have you along, everybody. We're going to mostly take a pass on the old standbys this week, jobs and inflation and data, and we are turning for our economic through line instead to foreign affairs. China's President Xi Jinping is headed to Washington this week. Our slice of it, at least to start, is the on-again-off-again, on-again-off-again trade war between the two biggest economies in the world. And if you have lost track of where things stand, join the club. Marketplace's Justin Ho gets us going with a refresher.

Justin Ho (1:55)

It wasn't too long ago that tariffs on Chinese goods were skyrocketing.

Megan Schoenberger (1:59)

Back in the spring of last year, US tariffs on Chinese goods reached 145% at their peak.

Justin Ho (2:06)

Megan Schoenberger is Senior Economist with KPMG. She says China was hitting back too.

Megan Schoenberger (2:11)

Reciprocal tariffs on US goods reached 125%.

Justin Ho (2:15)

But in the time since, tariffs have come down. Ed Gresser, with the Progressive Policy Institute, says when you average the tariffs that are in place right now, Most of the things you're buying in a store that are Chinese-made will have about a 20 to 30% tariff depending on the type of product. Gresser says that's still higher than tariffs were during the Biden administration. But he says it is a sign that the trade war is on hold.

Ed Gresser (2:38)

It's not like issues are settled. It's more like both sides have been bloodied a bit and are feeling it in their best interests to not continue that for a while.

Justin Ho (2:49)

Imports from China have been picking up this year. Megan Schoenberg with KPMG says that's been fueled by demand for computers, data storage devices and other components needed to build out AI infrastructure.

Megan Schoenberger (3:00)

It is the main driver of why we see a larger trade deficit in the most recent numbers. And a lot of these products importantly are exempted from tariffs.

Justin Ho (3:10)

But exports to China have not been very strong. Earlier this year, China said it would buy about 25 million metric tons of American soybeans. But Naomi Bloom with Total Farm Marketing says at this point, China has purchased approximately half of that. The Trump administration's also claimed that China will purchase about $17 billion worth of cotton, sorghum, corn and other ag products. Bloom says that would be a huge relief for American farmers.

Naomi Bloom (3:37)

When you have over $6 diesel, the farmers are still not making money because they're getting ready to harvest. And some of those combines take 300 to 400 gallons of diesel.

Justin Ho (3:47)

But so far, Bloom says China hasn't really shown up. I'm Justin Ho from Marketplace.

Kai Ryssdal (3:53)

300 gallons of diesel, that's six bucks a whack, right? Wall Street today, well, my goodness, traders were in quite a good mood. Oil fell, stocks went up. Happy Monday. We'll have the details when we do the numbers.

Alright, let's talk commodities here for a bit, shall we? Not oil, the commodity most in the news of late, I know. But rather, a commodity that arguably can tell us almost as much as crude about the global economy, specifically about the prospects for global growth, copper. As its price goes up, so too does the outlook for the global economy, because copper is used in so many different industries. And copper prices have indeed been going up 45% this year so far, a record high earlier this month. But as Marketplace's Henry Epp reports, there are some things going on in the copper market right now.