00:01Trump's Board of Trade has just delivered its first big outcome.
00:04Here's what it means.
00:05The best way to think about the Board of Trade is that it's a committee to cut tariffs.
00:09So on the U.S. side, you've got U.S. Secretary of Treasury, Scott Besson,
00:12and on the Chinese side, Vice Premier, Hurley Fung.
00:15They've been meeting over the last couple of months to come up with a list of products,
00:19non-sensitive items, where both sides can agree, let's cut some of those tariffs.
00:23So, for example, the U.S. is going to be cutting tariffs on Chinese imports of toys,
00:30magic tricks, billiard balls, the kind of products that we associate with made in China,
00:35but which aren't particularly sensitive.
00:37They don't have a national security connotation to them.
00:39And on the Chinese side, imports from the U.S., I should say, of agricultural products,
00:44medical equipment, corn, sorghum, and then things like emus, donkeys are even included.
00:50And I think what the details behind both those lists shows is that this is really
00:56trying to hone in on products that just aren't going to create much of a ripple.
01:01So we're not seeing semiconductors.
01:03No, we're not seeing rare earths.
01:05And I think a bigger point here is that this is still a really small slice of the trade.
01:08We're talking about $30 billion or so in each direction versus a trade that runs in the
01:14hundreds of billions.
01:15So the vast majority of trade between the two countries will still have tariffs on it,
01:20despite this board of trade.
01:22This is just an attempt to carve out, as a starting point, a set of products where trade
01:27can go back to some kind of normality.
01:29And I think that really just reflects the limited appetite on both sides for going back
01:35to a kind of pre-trade war world.
01:37Like, this deal does not take us anywhere near back to the way things were.
01:41However, this is an extension of the truce, and it's an attempt to find some common ground.
01:46But what it shows is there's just not that much common ground on trade for going back
01:50to a very low tariff level.
01:52And now that those lists are out there, the next step is for both sides to actually come
01:57together and finalize the tariff cuts on those products.
02:00So right now, what we have is the list, the provisional agreed set of products.
02:06And then the next step will actually be to cut those tariffs.
02:08So we don't know when that's going to happen yet.
