US-China Tariff Rollback and Truce
Analysis based on 7 articles · First reported May 12, 2025 · Last updated May 12, 2025
The agreement between the United States and China to roll back tariffs and call a 90-day truce in their trade war has led to a sharp rise in stock markets globally, with the S&P 500 and Dow Jones Industrial Average futures jumping significantly. Oil prices surged, and the U.S. dollar gained against other major currencies, reflecting positive investor sentiment and a de-escalation of trade tensions that had unsettled the global economy.
The United States and China have reached a deal to roll back most of their recent tariffs and implement a 90-day truce in their trade war. This agreement, announced by U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent in Geneva, involves the United States dropping its tariff rate on Chinese goods by 115 percentage points to 30%, and China lowering its rate on U.S. goods by the same amount to 10%. China's Commerce Ministry also confirmed the cancellation of 91% of tariffs and the suspension of another 24% for 90 days, along with the suspension or removal of other retaliatory measures. The deal aims to prevent a complete blockage of goods between the two major economic powers, which neither side desires. While investors, including those in the S&P 500, Dow Jones Industrial Average, China — Hong Kong's Hang Seng index, Germany, and France, reacted positively to the de-escalation, economists like Mark Williams of Roger Bootle and Dani Rodrik of Harvard University cautioned that the truce is temporary and significant tariffs remain, with uncertainty about future talks. The agreement is seen as an important step towards resolving differences and fostering cooperation, injecting more certainty and stability into the global economy.
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