The United States and China agreed on Monday to suspend most tariffs on each other's goods, a move that reflects signs of easing trade tensions between the world's two largest economies.
"We have reached an agreement on a 90-day suspension and a significant reduction in tariff levels," US Treasury Secretary Scott Besant said at a press conference. "Both sides will reduce tariffs imposed under the reciprocal tariff by 115%."
During a joint press conference, the US Treasury Secretary said it was in both countries' interests to "ensure a trade balance," stressing the existence of "a mechanism to continue talks with China" in the near future. Bessent added, "We would like China to open up to more American goods," noting the "possibility of concluding new purchase agreements with Beijing."
US Trade Representative Jameson Greer also participated in the conference, where they reviewed progress in bilateral trade negotiations.
Customs agreement details
The United States announced that it will reduce tariffs on most Chinese imports from 145% to 30%, including fentanyl-related tariffs, by May 14. In return, China will reduce its tariffs on US goods from 125% to 10%.
This agreement comes after the two sides agreed to a 90-day "pause" in tariffs, with both sides pledging to mutually reduce tariffs by 115%.
Immediate impacts on markets
The announcement of the agreement triggered significant movements in financial markets, with the yield on the 10-year US Treasury note jumping to its highest level in a month. In China, 5-year government bond futures fell 0.3% to 105.790 points.
Meanwhile, the euro fell 1.1% against the US dollar, heading for its worst day this year. The dollar index rose about 1.2%, while spot gold prices fell about 2.7% to $3,234 per ounce.
These moves reflect the markets' positive reaction to the de-escalation of the trade dispute, amid expectations that the agreement will ease inflationary pressures and boost global economic growth prospects.
