#TradeTruce | U.S.–China Trade War Eases

May 12, 2025 – Major De-escalation Announced

The economic standoff between the U.S. and China has entered a cooling phase as both nations announce a major rollback of retaliatory tariffs.

Key Developments:

• Tariff Rollback Deal: Following intensive negotiations in Geneva, the U.S. and China have agreed to mutual tariff reductions, marking a major turning point in the ongoing trade war.

• Reciprocal Cuts:

• U.S. tariffs on Chinese imports cut from 145% to 30%

• China slashes tariffs on U.S. goods from 125% to 10%

• 90-Day Truce Period: Both sides have agreed to a three-month negotiation window, pausing new trade restrictions while deeper discussions continue.

• Official Optimism:

• U.S. Treasury Secretary Scott Bessent: “Substantial progress has been made.”

• U.S. Trade Rep. Jamieson Greer highlighted the surprising speed of consensus.

• China’s Vice Premier He Lifeng confirmed “important progress” and a new framework for ongoing consultations.

Market Response:

Global financial markets rallied on the news. U.S. stock futures surged, and Asian indices opened strong. Analysts anticipate a boost in investor confidence and a potential ripple effect across commodities, tech, and crypto markets.

Background:

• The trade war escalated in April 2025, effectively freezing trade between the U.S. and China.

• The U.S. imposed steep tariffs to address a $295.4B trade deficit with China.

• Global supply chains and inflation rates were under serious pressure.

What to Watch:

• Will this truce lead to long-term resolution?

• How will global markets—including crypto—react to renewed trade flows?

• Could this drive a shift in capital allocations and global risk appetite?

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