#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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