#TradeWarEases On May 12, 2025, the United States and China announced a significant reduction in reciprocal tariffs for a period of 90 days, marking a major de-escalation in their prolonged trade war.

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🔍 Agreement Details

Tariff Reduction: The United States will lower tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on American products from 125% to 10%.

Suspension of Non-Tariff Measures: China will also suspend certain non-tariff measures affecting American goods.

Permanent Dialogue Mechanism: Both countries have agreed to establish a permanent dialogue mechanism to prevent future trade escalations, with designated high-level representatives from each side.

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📈 Market Reactions

The announcement of this agreement led to a positive reaction in global financial markets. U.S. stock futures rose, and Asian markets also recorded gains. The U.S. dollar strengthened, while Treasury yields increased, reflecting a renewed appetite for risk among investors.

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🧭 Outlook and Implications

Although this agreement represents a significant step forward, analysts emphasize that it is a temporary measure. Underlying issues, such as intellectual property protection and industrial subsidies, remain unresolved. Both parties have expressed their willingness to continue negotiations to reach a more comprehensive trade agreement.