#TradeWarEases Truce of 90 days between the USA and China

On May 12, 2025, the United States and China announced a significant mutual reduction of tariffs, marking a 90-day truce in their long trade war. The United States will lower tariffs on Chinese imports from 145% to 30%, while China will reduce tariffs on American products from 125% to 10%.

The agreement, reached during high-level talks in Geneva between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, aims to de-escalate tensions and establish a mechanism for further negotiations.

Financial markets reacted positively: global stock indices rose, the dollar strengthened, and US Treasury yields increased. However, analysts warn that this truce is temporary and that fundamental issues remain unresolved.

Both parties emphasized the importance of avoiding economic decoupling and working towards a more balanced trade relationship. Discussions will continue in the coming months, with the goal of reaching a more lasting agreement.

This truce offers temporary relief to the global economy, but the future of trade relations between the two largest economies in the world remains uncertain.