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As of May 13, 2025, there are significant signs of easing in the China-U.S. trade war. In high-level closed-door talks held in Geneva, Switzerland, from May 10 to 11, both sides reached a 90-day temporary tariff ceasefire agreement and established a permanent trade consultation mechanism, laying the foundation for future cooperation.

📉 Tariff Adjustments and Agreement Content

Tariff Reduction: The United States will reduce tariffs on Chinese goods from 145% to 30%, while China will reduce tariffs on U.S. goods from 125% to 10%. Additionally, both sides agreed to suspend the implementation of an extra 24% tariff for a period of 90 days.

Non-Tariff Measures: China has committed to suspending or canceling non-tariff countermeasures against the United States starting April 2, 2025.

Permanent Consultation Mechanism: Both sides established a permanent trade consultation mechanism, co-led by the Chinese Vice Premier and U.S. Secretary of the Treasury Scott Bessen and Trade Representative Jamison Greer, aimed at preventing future trade tensions from escalating.

📈 Market Response and Economic Impact

Following the agreement, global market reactions were positive:

Stock Market Surge: The U.S. stock market surged significantly, with the S&P 500 index rising by 3.3% and the Nasdaq index rising by 4.4%.

RMB Appreciation: The Chinese yuan strengthened against the U.S. dollar, with the offshore yuan exchange rate rising by more than 300 points.

Safe-Haven Asset Decline: Gold prices fell by 2.5%, reflecting a relaxation in market risk aversion.

🔍 Outlook and Challenges

Although this agreement brings short-term relief to China-U.S. trade relations, there are still the following challenges:

Agreement Duration: The current tariff ceasefire agreement is only for 90 days, and it is uncertain whether a long-term agreement can be reached in the future.

Structural Issues: There are still differences between the two sides on structural issues such as technology transfer and intellectual property protection, which need further negotiation to resolve.

Political Factors: The upcoming U.S. presidential election may impact the continuity of trade policies.