Explanation:
Option a) is correct. The U.S. began imposing tariffs on China in February 2025, initially citing the sale of fentanyl as the reason. By April 10, these tariffs had escalated to extreme levels, with U.S. tariffs on Chinese goods reaching 145%, meaning a $100 Chinese product would cost $245 in the U.S. after tariffs.
Option b) is incorrect. The trade truce did not completely eliminate all tariffs. After the truce, both countries reduced their base tariff rates to 10% on each other's imports, with the U.S. still imposing an additional 20% tariff specifically due to fentanyl smuggling concerns.
Option c) is incorrect. While China did implement non-tariff barriers such as export restrictions on rare earth minerals and regulatory actions against U.S. companies, these were suspended after the truce as part of the agreement.
Option d) is incorrect. The U.S. economy contracted in the first quarter of 2025, even before the full impact of the tariffs could be felt. Economists widely predicted a recession and the risk of stagflation-a dangerous mix of economic stagnation and high inflation.
Explanation:
Option a) is correct. The U.S. began imposing tariffs on China in February 2025, initially citing the sale of fentanyl as the reason. By April 10, these tariffs had escalated to extreme levels, with U.S. tariffs on Chinese goods reaching 145%, meaning a $100 Chinese product would cost $245 in the U.S. after tariffs.
Option b) is incorrect. The trade truce did not completely eliminate all tariffs. After the truce, both countries reduced their base tariff rates to 10% on each other's imports, with the U.S. still imposing an additional 20% tariff specifically due to fentanyl smuggling concerns.
Option c) is incorrect. While China did implement non-tariff barriers such as export restrictions on rare earth minerals and regulatory actions against U.S. companies, these were suspended after the truce as part of the agreement.
Option d) is incorrect. The U.S. economy contracted in the first quarter of 2025, even before the full impact of the tariffs could be felt. Economists widely predicted a recession and the risk of stagflation-a dangerous mix of economic stagnation and high inflation.
