After weeks of tariff volley, the US and China have agreed to slash reciprocal tariffs for 90 days, sending global equity markets into a broad rally.
Under the deal announced after two days of negotiations in Geneva, US tariffs on Chinese goods will drop from a punitive 145% to 30%, while China will reduce its duties on American imports from 125% to 10%. The 115-percentage-point cuts mark a larger-than-expected de-escalation, though the remaining 30% US rate is still regarded as commercially burdensome.
“This is a significant recalibration,” said US Trade Representative Jamieson Greer. “We’re not where we want to be yet, but this buys space to negotiate.”
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The temporary rollback, set to begin Wednesday, is aimed at “easing tensions through continued negotiation,” according to a joint US-China statement. U.S. Treasury Secretary Scott Bessent emphasized that “neither side wants a decoupling,” adding that the “Chinese delegation showed a new level of seriousness, especially on the fentanyl issue.”
Market reaction was swift. Germany’s DAX rose nearly 1%, France’s CAC 40 climbed 1.3%, and Danish shipping giant Maersk jumped 12% on hopes of a revitalized global trade pipeline. In commodities, Brent crude gained 2.9% to $65.75 a barrel, while the yuan surged to a six-month high.
The S&P 500 is expected to open above levels last seen before President Donald Trump’s April 2 “Liberation Day” tariff hike, which triggered the current trade standoff.
While both sides touted the deal as a mutual win—Beijing calling it a move in the “common interest of the world”—the underlying issues remain unresolved.
The 30% residual US tariff includes a 20% surcharge tied to China’s alleged role in America’s fentanyl crisis. That component remains untouched, indicating Washington’s broader geopolitical leverage remains in play. As Greer noted, “the US still faces a $1.2 trillion trade deficit. These talks are a step, not a solution.”
Information for this briefing was found via BBC, The Guardian, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
