- The United States and China have agreed to significantly reduce tariffs on each other’s goods for 90 days, marking a pivotal breakthrough in the years-long trade war.
Global markets surged in response. The Dow jumped 2.8%, the S&P 500 rose 3.3%, and the Nasdaq climbed 4.4%—a sign of renewed investor confidence.
The agreement, announced jointly on Monday, lowers US tariffs on Chinese goods from 145% to 30%, and China’s tariffs on American imports from 125% to 10%. However, US fentanyl-related tariffs on Chinese products remain in place.
Both countries described the outcome as “substantial progress,” with officials emphasizing the importance of a “sustainable, long-term” trade relationship.
The decision also includes China suspending non-tariff countermeasures such as rare-earth export bans, blacklisting of US firms, and an antitrust probe into DuPont.
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The trade war, ignited by former President Donald Trump’s tariff policies, has disrupted global supply chains and fueled economic uncertainty.
The US recently recorded its first quarterly GDP contraction since 2022, while Chinese exports to the US dropped sharply last month, impacting factory output.
A mechanism for ongoing talks—led by Chinese Vice Premier He Lifeng and US officials Scott Bessent and Jamieson Greer—has been established to guide further negotiations. Bessent acknowledged the rollback was essential to avoid a trade “embargo,” and signaled both sides are keen to reduce tensions.
Chinese officials called the development a “constructive step,” softening their earlier hardline stance. Just last week, Bessent had downplayed expectations, indicating only minor de-escalation was likely.
Though temporary, analysts see this as a turning point. Wedbush Securities’ Dan Ives called it a “best-case scenario,” predicting deeper concessions ahead.
The next round of talks could lead to a more comprehensive resolution in the long-standing economic standoff between the world’s two largest economies.
Reported by CNN
