- The U.S. and China have agreed to a 90-day halt on new tariffs following high-level talks in Geneva, signaling a potential easing of trade tensions.
- U.S. Treasury Secretary Scott Bessent confirmed reciprocal tariffs would be reduced by 115 percentage points.
- Global financial markets responded positively, with gains in stocks, the dollar, and bond yields.
- Experts remain cautiously optimistic, citing ongoing uncertainty beyond the 90-day window.
Global markets rallied on Monday after the United States and China announced a 90-day pause in escalating tariffs, providing investors with renewed hope that a full-blown trade war might be avoided. The agreement was reached during weekend talks in Geneva, marking the first direct engagement between the two countries since President Donald Trump’s return to office and the reintroduction of sweeping global tariffs.
U.S. Confirms Major Tariff Reduction
Speaking after the talks, U.S. Treasury Secretary Scott Bessent revealed that reciprocal tariffs would be slashed by 115 percentage points. The announcement was detailed in a joint statement from both sides.
MARKET REACTION
- Stocks: U.S. S&P 500 and Nasdaq futures climbed; Europe’s STOXX 600 index rose 0.8%.
- Forex: The dollar gained sharply, up 2.1% to 148.49 yen; the euro dropped 1.5% to $1.1078.
- Bonds: U.S. 10-year Treasury yields increased 8 basis points to 4.457%.
Industry Reactions & Expert Commentary
Charles Wang, Shenzhen Dragon Pacific Capital Management:
“The outcome signals a return to rational diplomacy. However, long-term tariffs of 54% on Chinese exports and 34% on U.S. goods remain if no deal is reached in 90 days, highlighting that this is more a short-term relief than a lasting solution.”
Sheldon MacDonald, CIO, Marlborough, London:
“This reduction is greater than anticipated and reassures markets that Trump may not pursue extreme disruption. Still, the tariff regime remains worse than pre-Trump levels, and recession risks haven’t vanished.”
Simon Edelsten, Goshawk Asset Management:
“The attempt to resolve long-term issues is expected, but modest tariffs can still shift trade patterns significantly. China may devalue its currency to offset costs, risking further tensions. It’s a saga with no quick resolution.”
Jan von Gerich, Chief Market Analyst, Nordea:
“Markets are reacting positively, but I remain skeptical. There’s still a risk the fine print won’t satisfy both sides. Uncertainty remains high.”
Jane Foley, Head of FX Strategy, Rabobank:
“There’s a collective market sigh of relief, but the 10% base tariff remains. The 90-day pause has started the clock, and we’re far from pre-Trump trade dynamics.”
Kenneth Broux, FX and Rates Strategist, Societe Generale:
“This is a clear endorsement of risk assets. The dollar is now catching up with equities and bond yields after lagging.”
Zhiwei Zhang, Chief Economist, Pinpoint Asset Management:
“This exceeded expectations. It reassures markets about global supply chains, but it’s only a reprieve—the real negotiations start now.”
Arne Petimezas, Research Director, AFS Group:
“A sharp shift from the U.S. came as a surprise. While temporary, it signals lower tariffs and may fuel a market rally. The question is whether Trump can credibly return to tough measures after this pause.”
William Xin, Chairman, Spring Mountain Pu Jiang Investment Management:
“This outcome beat market expectations. Just having the two sides engage was hopeful, but this truce adds stability and could fuel a sustained upswing in Chinese equities and the yuan.”
While the agreement delivers short-term relief and market optimism, it leaves unresolved questions about long-term trade policy. Investors and analysts caution that the next 90 days will be crucial in determining whether a lasting resolution can be reached, or if this is merely a temporary calm.
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Source: Reuters
