China and the U.S. agreed in the joint statement at the Geneva economic and trade press conference to significantly reduce the imposed tariffs for '90 days'.
The U.S. side has suspended the implementation of the 24% tariff on April 2, 2025, retaining a 10% tariff; the U.S. has canceled the retaliatory tariffs announced on April 8 and April 9, 2025—overall, this will reduce tariffs on Chinese goods from 145% to 30%.
The details are crucial for the global market:
1. In response to this news, U.S. stock futures (Nasdaq 100 index futures rose 3.3%), and the offshore yuan surged—this time it did not fall back after the spike. Gold prices, on the other hand, dropped significantly.
2. The specific measures in the joint statement only mentioned tariffs and did not involve other issues of concern to both parties. Therefore, what we see more from this statement is 'mutual understanding and mutual respect'.
3. A '90-day pause' has been set, during which consultations will continue to determine whether the '24% tariff' will be imposed. In other words, this is more like a 'ceasefire agreement' rather than a 'peace treaty'. In the short term, this is favorable, but the overall situation has not fundamentally improved, and the risk of a second round of tariffs still exists. For investors, enjoying the short-term 'dividends' brought by this style switch is sufficient, but they must also be fully prepared for the upcoming structural differences in negotiations.
4. It appears more like a continuation (transition) of the 'Phase One Trade Agreement' between China and the U.S., rather than a true 'Phase Two Trade Agreement'. In other words, this is a short-term solution—disputes have been shelved, addressing the easier parts of the negotiation, and it will soon enter the more difficult parts of the negotiation. It can only be said to be a good sign, but not necessarily good news.
5. U.S. Treasury Secretary Basant stated at a press conference that currency issues were not discussed in negotiations with China—any statements regarding exchange rates are crucial.
6. It is clear that China holds the upper hand in the negotiations (not making concessions, not even committing to purchasing U.S. goods), as Trump faces the 2026 midterm elections, and concerns over empty shelves may have heightened the urgency of this meeting. In addition, the U.S. team was somewhat constrained by Trump during the negotiations, as he continuously posted to raise market expectations.
For Trump, at least the short-term solution reached with China (the bilateral relationship between China and the U.S. is the most thorny and complex) will be widely regarded as a good sign for constructive negotiations with other countries.
