On May 12, 2025, the United States and China announced a significant easing of trade tensions by agreeing to a 90-day reciprocal tariff reduction. This development marks a potential turning point in the prolonged trade conflict between the two nations.
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🇺🇸🇨🇳 Key Details of the Agreement
- Tariff Reductions: The U.S. will lower tariffs on Chinese goods from 145% to 30%, while China will reduce tariffs on American imports from 125% to 10%. [1]
- Duration: The tariff reductions are set for a 90-day period, during which both countries aim to negotiate a more comprehensive trade agreement.
- Exemptions: Certain tariffs, such as the U.S. 20% levy on Chinese imports linked to fentanyl smuggling, will remain in place. [2]
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📈 Market Reactions
The announcement had an immediate positive impact on global financial markets:
- U.S. Stock Markets: The Dow Jones Industrial Average surged by 1,044 points (2.5%), the S&P 500 rose 2.9%, and the Nasdaq increased by 4%. [2]
- Global Markets: Stock indices in Europe and Asia also experienced gains, reflecting increased investor confidence. [1]
- Currency and Commodities: The U.S. dollar strengthened, while gold prices fell due to reduced demand for safe-haven assets. [3]
