Source -Hong KongCNN —
The United States and China agreed Monday to drastically roll back tariffs on each other’s goods for an initial 90-day period, in a surprise breakthrough that has de-escalated a punishing trade war and buoyed global markets.
The announcement, which was made in a joint statement, comes after a weekend of marathon trade negotiations in Geneva, Switzerland by officials from the world’s two largest economies, during which both sides touted “substantial progress.”
Both sides recognize “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” they said in the statement.
Global investors are cheering a thaw in the trade war sparked by US President Donald Trump’s massive tariffs, which have roiled financial markets, disrupted supply chains and stoked recession fears.
Dow futures jumped more than 2%, while S&P 500 futures rose nearly 3%, and the tech-heavy Nasdaq Composite futures went up more than 3.5% during Asian afternoon trading. Asian markets were higher too, with Hong Kong’s Hang Seng index ending about 3% higher. The US dollar gained ground against other major currencies, while the price of gold, which tends to drop when investors are feeling more secure, fell.
The mutual tariff revisions will be imposed by May 14. Trump’s 20% fentanyl-related levies on China, imposed in February and March, will stay. However, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.
That effectively means the US will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%, according to the joint statement.
