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2d ago

U.S. and China Agree to 90-Day Tariff Truce, Slashing Rates

The temporary agreement reduces U.S. tariffs on Chinese goods to 30% and China's tariffs on U.S. goods to 10%, offering a reprieve for global markets but leaving key sectors unresolved.

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Stock markets opened for the first time on Monday since the India-Pakistan ceasefire understanding.
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Overview

  • The U.S. and China announced a 90-day pause in their trade war, cutting tariffs significantly to 30% for U.S. imports and 10% for Chinese imports.
  • Markets responded with sharp rallies: the S&P 500 surged 3%, the Dow gained over 1,000 points, and the Nasdaq jumped 4.3%.
  • Crude oil prices rose by over 3%, while U.S. Treasury yields climbed as investors reduced expectations for Federal Reserve rate cuts this year.
  • The tariff reductions exclude key sectors like steel, aluminum, and autos, highlighting ongoing trade tensions and unresolved disputes.
  • Economists estimate the truce could boost U.S. GDP by 0.4 percentage points in 2025, but long-term trade policy uncertainty persists.