Historic Trade Breakthrough: U.S. and China Ease Tensions with Tariff Cuts!

Historic Trade Breakthrough: U.S. and China Slash Tariffs, Boost Global Markets!

In an unexpected move that has defused a brutal trade war and boosted international markets, the United States and China decided Monday to significantly reduce tariffs on each other’s goods for the first 90 days. The news, which was delivered in a joint statement, follows a full weekend of intense trade talks between the two biggest economies in the world in Geneva, Switzerland, where both parties reported significant progress. According to the declaration, both parties acknowledge the significance of a sustainable, long-term, and mutually beneficial economic and trade relationship.

Global Markets Rally as Trade War Thaws

Investors around the world are applauding a thaw in the trade war that US President Donald Trump started with his huge tariffs, which have raised worries of a recession, disrupted supply lines, and roiled financial markets. During Asian afternoon trading, Dow futures surged more than 2%, S&P 500 futures increased by almost 3%, and the tech-heavy Nasdaq Composite futures increased by more than 3.5%. Asian markets also saw gains, with the Hang Seng index in Hong Kong closing almost 3% higher. While the price of gold, which usually declines when investors feel more comfortable, dropped, the US dollar strengthened versus other major currencies.

Massive Tariff Cuts Incoming: How Will the Deal Impact Trade?

By May 14, the bilateral tariff changes will be put into effect. The 20% fentanyl-related taxes that Trump levied on China in February and March will remain in place. But for ninety days, both parties have committed to reducing reciprocal tariffs on the other by 115 percentage points. According to the joint declaration, China will reduce its duties on American imports from 125% to 10%, while the US will temporarily reduce its overall taxes on Chinese goods from 145% to 30%.

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