#TradeWarEases

U.S.–China Reach Temporary Tariff Agreement

Trade Shift Announced – May 12, 2025

The United States and China have reached a 90-day interim trade agreement, drastically lowering tariffs on key imports in a move that surprised global markets and revived cooperation hopes.

Key Changes

U.S. Tariffs: Reduced from up to 145% to 30% on select Chinese goods, effective immediately.

China’s Response: Tariffs on U.S. imports cut from 125% to 10%, targeting agriculture, energy, and tech sectors.

Strategic Timing

Election Year Advantage: A potential political win for the U.S. administration amid economic challenges.

Economic Pressures: Both nations seek relief from inflation and slowing growth.

Market Reactions

U.S. futures rose sharply; the S&P 500 and Dow gained in premarket trading.

Asian indices, led by the Hang Seng, surged over 3%.

Commodities like copper and soybeans rallied.

Outlook & Implications

This 90-day trial period could lead to long-term trade realignment. While political gains are evident, major structural issues remain unresolved.

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