Officials from both the United States and China have agreed to pause tariffs on their countries for 90 days, sending stocks rocketing up as investors breathe a sigh of relief and pour into a still-depressed market.
“We have reached an agreement on a 90-day pause and substantially moved down the tariff levels — both sides, on reciprocal tariffs, will move their tariffs down 115%," U.S. Treasury Secretary Scott Bessent said.
That lowering of tariffs applies to the measures announced by Trump on 2 April, which escalated to 145% on a variety of Chinese imports, triggering countermeasures from Beijing.
China imposes non-tariff measures, such as restricting the export of critical minerals essential to U.S. manufacturing of high-tech goods.
Pausing the escalated measures will allow the U.S. and China to continue negotiations and alleviate some import tax pains for industries around the globe.
“They’ve agreed to open up China,” the U.S. president claimed at a press conference at the White House on Monday morning.
A fentanyl-related tariff will still apply, and so will sector-specific restrictions on cars, steel and aluminium.
The top U.S. representative at the talks in Geneva, Bessent, said both sides had shown “great respect” in the negotiations.
“The consensus from both delegations this weekend was neither side wants a decoupling,” he said.
The two superpowers will establish a mechanism to continue discussions about economic and trade relations.
“The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the U.S. side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative,” the nations said in a joint statement.
“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties.”
Markets react
The news sent futures markets into a frenzy and the Monday trade session reinforced the upward ticking sentiment in stocks on Wall Street.
The Dow Jones Industrial Average jumped 1,160.7 points, or 2.8%, to close at 42,410.1. The S&P 500 climbed 3.3% to finish at 5,844.2, while the Nasdaq Composite led gains with a 4.4% surge to 18,708.3.
Tesla rallied nearly 6.8%, Apple added 6.2%, NVIDIA rose 5.4% and Amazon jumped an eye-watering 8.1%.
Find out more: Wall Street in the green as US, China cut tariffs
