Geneva, 12 May 2025 - The United States and China have agreed to significantly reduce tariffs and pause new trade measures for 90 days, marking a major step toward de-escalating tensions and fostering long-term economic cooperation.

Key Developments

Tariff Reductions: The U.S. will lower its tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on U.S. goods from 125% to 10% during the 90-day period.

Temporary Suspension: Both countries have agreed to suspend the imposition of new tariffs for 90 days, providing a window for further negotiations aimed at resolving outstanding trade issues.

Establishment of Dialogue Mechanism: The agreement includes the creation of a new trade consultation mechanism to prevent future escalations and facilitate ongoing dialogue.

Market Reactions

The announcement of the trade deal has had a positive impact on global financial markets:

U.S. stock futures surged, with the S&P 500 and Nasdaq gaining 2.8% and 3.6%, respectively.

Asian markets also responded positively, with China's CSI 300 index rising by 0.6%.

Remaining Challenges

 Despite the progress, several challenges remain:

Temporary Nature: The 90-day pause is a temporary measure, and both sides will need to address deeper structural issues in their trade relationship during this period.

Underlying Tensions: While the agreement marks a de-escalation, it does not fully resolve underlying tensions, including concerns over intellectual property rights, market access, and other trade practices.

Further details of the agreement are expected to be released soon, as both nations work towards a more comprehensive resolution of their trade disputes.

Source: news outlets