Developments in trade relations between the United States and China

In a significant development in trade relations between the United States and China, the two countries announced on May 12, 2025, an agreement to reduce mutual tariffs for 90 days, in a move aimed at easing trade tensions that have escalated in recent months.

Details of the agreement

Reduction of American tariffs: The United States agreed to reduce the tariffs imposed on Chinese imports from 145% to 30%.

Reduction of Chinese tariffs:

For its part, China announced a reduction of tariffs on American imports from 125% to 10%, with an additional suspension of tariffs by 24% during the agreement period.

Duration of the agreement:

This temporary easing lasts for 90 days, with the possibility of extension or modification based on the results of future negotiations.

Immediate economic impacts

Stock markets:

Global financial markets witnessed a notable recovery following the announcement of the agreement, with the Dow Jones index rising by more than 1,100 points, while the S&P 500 and Nasdaq indices recorded gains of 3.3% and 4.4% respectively.

The American currency:

The dollar index rose by 1.193%, reflecting investor confidence in the improvement of trade relations between the two economic powers.

Reactions and analyses

United States: U.S. Treasury Secretary, Scott Pisent, described the talks as "very constructive," pointing to the possibility of reaching a comprehensive trade agreement in the coming weeks.

China: Beijing praised the agreement as "an important first step" towards easing tensions, emphasizing the importance of continuing dialogue to achieve sustainable results.

Economic experts: Many analysts expressed cautious optimism, noting that the agreement represents a temporary calming, and that fundamental challenges in trade relations remain.

General context

This agreement comes after a period of escalation in the trade war between the two countries, where the United States imposed tariffs of up to 145% on some Chinese imports, and China responded by imposing tariffs of 125% on American goods. These measures negatively impacted global trade and contributed to a slowdown in economic growth in both countries.

Future outlook

While the agreement represents a positive step towards easing tensions, many core issues, such as intellectual property rights and market access, still need permanent solutions. The next three months will play a crucial role in determining whether this temporary truce can be transformed into a long-term and sustainable trade agreement.