Bitcoin price today: gains to $120k, near record high on U.S. regulatory cheer
Investing.com -- Bank of America analysts provided fresh insights on how recent U.S. trade agreements with allies may shape ongoing negotiations with China.
Before the August 1 deadline, the Trump administration secured deals with Japan, South Korea, the European Union, and others, setting a framework that offers clues for U.S.-China talks.
According to BofA, a key theme in these deals is the setting of reciprocal tariffs predominantly between 15% and 20%, lower than the previous rates of over 20% but higher than the 10% pause earlier this year.
For example, Japan, Korea, and the EU now face tariffs at 15%, while Southeast Asian nations see slightly higher rates of around 19-20%. Exceptions exist for countries with U.S. trade deficits, such as the UK, Singapore, and Brazil, where tariffs remain at 10%. India stands out with a notably high 25% rate. Sectoral tariffs, including autos and steel, largely remain in place.
BofA highlights that “countries that have stricken a trade deal with the U.S. so far have made similar concessions,” mainly by promising increased imports and investments into the U.S., focusing on LNG, agriculture, autos, and military equipment.
However, the binding nature of the commitments is said to be uncertain, as Japan’s chief negotiator acknowledged that only a small fraction of pledged investments might materialize.
Regarding China, BofA notes its unique geopolitical situation and trade surplus make it a complex case.
They expect “upside risks to the existing 10% reciprocal tariff rate,” with China’s effective tariffs possibly rising to 20-25%.
Yet, “a partial or full removal of the fentanyl tariffs is still likely if China offers more specific action items,” BofA stated.
On balance, the bank believes China’s effective tariff rate could reduce to around 30-35%, down 5-10 percentage points from current levels.
These developments suggest that while the U.S.-China trade dialogue faces challenges, recent trade deals with other countries provide a benchmark and potential leverage in ongoing talks, BofA concludes.