After marathon weekend talks in Geneva, negotiators issued a rare joint statement saying the world’s two largest economies recognize “the importance of a sustainable, long‑term, and mutually beneficial economic and trade relationship.”
What is in the deal
- Tariff cuts: Beginning 14 May, Washington will lower its average levy on Chinese goods to 30 % from 145 %, while Beijing will cut duties on U.S. products to 10 % from 125 %. Fentanyl‑related U.S. tariffs of 20 % imposed earlier this year remain in place.
- Duration: The reductions run for 90 days but can be extended if talks progress.
- Non‑tariff moves: China will suspend export curbs on rare‑earth minerals, lift probes against U.S. firms and scrap its “unreliable entity” list for the truce period.
Markets cheer
Wall Street futures leapt, with S&P 500 contracts up almost 3 % and Nasdaq futures 3.5 % higher in Asian trading. Hong Kong’s Hang Seng closed 3 % stronger; the dollar firmed and spot gold fell as risk appetite returned.
“This is the best‑case scenario from Geneva,” said Dan Ives of Wedbush Securities. “We expect the numbers to fall further as a comprehensive deal takes shape.”
Why the pressure built
U.S. GDP shrank last quarter as importers front‑loaded shipments ahead of rising tariffs.
China’s factory output hit a 16‑month low in April, prompting Beijing to seek relief.
Both sides framed the truce as averting an “embargo‑like” situation that was hurting global supply chains.
Who will talk next
A new high‑level channel will be led by Chinese Vice‑Premier He Lifeng, U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. The mechanism will rotate meetings between the two countries—or a neutral venue—while working groups tackle sector‑specific issues.
“Neither side wants to decouple,” Bessent told reporters. “We want trade—balanced trade—and both delegations are committed to achieving that.”
China’s Commerce Ministry called the accord “an important step toward resolving differences through equal‑footing dialogue.”
Outlook
Officials cautioned that deep disagreements remain over subsidies, technology transfers and state‑owned enterprises. But analysts said the 115‑percentage‑point tariff cut on each side removes the immediate recession risk that had rattled investors.
“It is a ceasefire, not a peace treaty,” one European trade diplomat noted. “But a ceasefire is how peace usually begins.”
(jh)
Source: CNN, BBC, Reuters