The United States and China have both announced coordinated tariff reductions, opening a 90-day window of calm that feels like a breakthrough.
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Following a weekend of negotiations in Switzerland, Chinese goods entering the US will now face a 30% tariff instead of the previous 145%, while tariffs on US goods heading into China will fall sharply from 125% to 10%.
These measures, though temporary and set to take effect within two days, were met with an immediate and strong reaction in markets.
Markets took the news as a brief escape from the grip of protectionism. Risk appetite jumped. The S&P 500 rose close to 3%, while the Nasdaq climbed nearly 4%. Gold dropped around 3%, suggesting some unwinding in demand for the best-in-class asset in the high-tariff regime.
Brent crude gained about 2.5% to trade near $66 a barrel, as improved trade prospects revived optimism and helped limit what could have been a deeper slide in global activity. Economically, this step back in tariffs is not a structural fix or a comprehensive deal.
But it signals a change in tone or at the very least a political willingness to pause. Under the surface, this move seems more like an effort to buy time. It may help pave the way for more serious talks over the coming three months. Markets read this as a sign that progress is possible. Not guaranteed, and not permanent, but at least it’s a step forward.
This shift creates room to reassess global trade flows and input costs, and it may offer support to corporate earnings in the next quarter. Even if temporary, this truce could give growth a nudge.
That said, investors are likely to keep a close eye on upcoming bilateral meetings which will shape the path beyond this 90-day pause. What happened today isn’t the end of the trade tensions, but it’s clearly a tactical pause. It’s the kind of day that feels like a reverse version of liberation day. Not a full removal of barriers, but a softening of them. Still, it was enough to let markets breathe and offer participants a moment of cautious hope, even if only for now
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