marketsClosed May 12, 2025
Global Stocks Climb After US, China Agree to Cut Tariffs for 90 Days
- US, China to temporarily lower some tariffs for 90 days
- Beijing to cut tariffs on US goods to 10% from 125%
- Washington to reduce duties on Chinese goods to 30% from 145%
- Dollar rallies to one-month highs against euro and yen
Thanks for joining us. Here are five key takeaways from US-China announcement after the two sides concluded trade talks over the weekend:
- Both sides issued identical statements on Monday agreeing to significantly reduce tariffs before May 14: Beijing lowered levies on US goods to 10% from 125% for 90 days, while Washington is reducing their levies to 30% from 145%
- China also said it would suspend or cancel its “non-tariff countermeasures” imposed on the US since April 2. That’s likely a reference to China’s addition on April 4 of seven rare earths to its export control list, a move widely viewed as a response to the increasingly punitive tariffs rolled out by the Trump administration.
- The US and China established an economic and trade consultation mechanism that will allow both sides to continue their negotiation
- US Treasury Secretary Scott Bessent said that the US and China agree neither side wants to decouple, adding there were “robust” discussions on fentanyl and that talks could lead to “purchasing agreements” by China
- Markets cheered the reduction in levies with Chinese stocks extending their gains with major gauges erasing tariff losses, while the dollar rallied to a one-month high versus the euro and yen
