Overview of the Agreement

In a notable development for international trade, the United States and China have agreed to significantly reduce tariffs on each other’s imports. This agreement, confirmed in a joint statement, will be enacted over an initial period of 90 days.

Details of Tariff Reductions

Under this agreement, the U.S. tariff on Chinese goods will decrease from 145% to 30% by Wednesday. Conversely, China will lower its tariffs on U.S. products from 125% to 10%. U.S. Treasury Secretary Scott Bessent stated, “Both sides on the reciprocal tariffs will move their tariffs down 115%,” which highlights the substantial nature of this trade de-escalation.

Impact on Global Markets

The easing of trade tensions has already begun to positively affect global markets. Following the announcement, major stock indices saw notable increases: the Dow Jones Industrial Average rose by approximately 2.2%, while S&P 500 futures climbed by 2.8%. Nasdaq futures experienced a substantial uptick of about 3.8%.

Additionally, the Stoxx Europe 600 index rose by 1%, and Hong Kong’s Hang Seng concluded the trading session with a gain of 3%.

Market Reactions

The strengthening of the U.S. dollar was evident against various currencies, including the euro, yen, and pound. In contrast, gold prices saw a downward trend as market sentiments shifted positively. The yield on 10-year Treasury notes increased to around 4.45%, while many cryptocurrencies also enjoyed gains.

Next Steps in U.S.-China Relations

The joint statement from both nations specifies the establishment of a mechanism to facilitate ongoing discussions regarding their economic and trade relations after the initial 90-day period.