In a significant development, the United States and China have reached a temporary agreement to suspend the majority of tariffs on each other’s goods, indicating a substantial reduction in trade hostilities between the two economic powerhouses.
This trade arrangement entails a reduction of “reciprocal” tariffs from 125% to 10%. However, the current 20% duties imposed by the U.S. on Chinese imports related to fentanyl will remain unchanged, resulting in total tariffs on China being set at 30%.
The breakthrough originated from high-stakes discussions between trade representatives from both nations, held in Switzerland over the past weekend.
U.S. Treasury Secretary Scott Bessent remarked on the positive nature of the talks during a news conference, stating, “We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process.”
“We have agreed on a 90-day pause and substantially reduced tariff levels. Both sides on the reciprocal tariffs will decrease their tariffs by a total of 115%,” Bessent noted.
Both countries have expressed a commitment to continue discussions surrounding economic and trade policies moving forward.
The announcement of the tariff suspension has positively influenced investor sentiment. In the U.S., Nasdaq futures indicated a 3.6% uplift, the S&P 500 futures rose by 2.8%, and the Dow climbed nearly 1,000 points or 2.3%.
Additionally, the ICE U.S. Dollar Index experienced a notable increase, rising 1.3% to a level of 101.63 as it measures the dollar against a range of global currencies.
Meanwhile, the pan-European Stoxx 600 index also rose 0.7% during early trading hours.
This is a breaking news story and will be updated shortly.
