In a major breakthrough after prolonged tensions, the United States and China on May 12 agreed to a 90-day truce on reciprocal tariffs, signaling a thaw in relations that had severely disrupted global supply chains. The agreement, reached following high-stakes negotiations in Geneva, will see the US reduce its tariffs on Chinese goods from 145% to 30%, while China will lower its duties on US goods from 125% to 10%. Both sides confirmed the tariff cuts would take effect by May 14, marking one of the sharpest reciprocal reductions in recent history.<\/p>\n
US Treasury Secretary Scott Bessent confirmed the development, stating that \u201cboth sides will move down their reciprocal tariff levels by 115 percentage points\u201d and characterized the discussions as “robust and productive.\u201d He further stressed that both nations agree they \u201cdo not want to decouple,\u201d a reference to fears of long-term economic disengagement between the world\u2019s two largest economies.<\/p>\n
Highlights:<\/p>\n
US to cut tariffs from 145% to 30%; China to reduce from 125% to 10%<\/p>\n<\/li>\n
Tariff reductions effective May 14 for 90 days<\/p>\n<\/li>\n
Talks described as productive; de-escalation seen as market-positive<\/p>\n<\/li>\n
Both sides to establish ongoing dialogue mechanism on trade<\/p>\n<\/li>\n<\/ul>\n
While the tariff rollback dominated headlines, fentanyl was a central focus in the Geneva dialogue. Bessent and US Trade Representative Jamieson Greer confirmed that both sides reached alignment on combating the synthetic opioid crisis. \u201cWe had a very robust and productive discussion on steps forward on fentanyl,\u201d Bessent noted, underlining its inclusion in the bilateral negotiations.<\/p>\n
The meeting also marked the first in-person engagement between senior economic leaders from both countries since the beginning of the Trump-era tariff surge. That policy had included an initial 20% tariff on Chinese imports in February, followed by a 34% duty in April and subsequent escalations that ultimately crippled nearly $600 billion in bilateral trade.<\/p>\n
Highlights:<\/p>\n
Fentanyl agreement included as part of broader trade truce<\/p>\n<\/li>\n
Geneva summit first face-to-face trade meeting since Trump\u2019s tariff blitz<\/p>\n<\/li>\n
$600 billion in two-way trade previously disrupted now back on table<\/p>\n<\/li>\n<\/ul>\n
Financial markets reacted with euphoria to the announcement, as investors rushed to price in reduced trade tensions. Futures on the S&P 500 rose 1.6%, while the Nasdaq 100 jumped 2%. European stock futures added nearly 1%, and the Hang Seng Index was poised for its best weekly run in a year. The US dollar strengthened against European peers, while gold tumbled by 1.6% and crude oil prices surged, reflecting a broader shift towards risk assets.<\/p>\n
Bond markets also adjusted, with Treasury yields climbing as bets on imminent interest rate cuts receded. \u201cThere is a de-escalation between China and the US… it\u2019s a clear vote by the market in favour of riskier assets,\u201d said Kenneth Broux, FX and rates strategist at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale.<\/p>\n
Highlights:<\/p>\n
S&P 500 up 1.6%, Nasdaq up 2%, Hang Seng sees best rally in a year<\/p>\n<\/li>\n
Gold down 1.6%, crude oil up; dollar catches up with equities and yields<\/p>\n<\/li>\n
US Treasuries sell off as expectations for Fed rate cuts decline<\/p>\n<\/li>\n<\/ul>\n
While the short-term impact is undeniably bullish, analysts cautioned that the deal is only temporary. \u201cThis is only a three-month reduction of tariffs. It\u2019s the beginning of a long process,\u201d said Zhiwei Zhang, chief economist at Pinpoint Asset Management. He added that although this is \u201cbetter than expected,\u201d the real challenge lies in arriving at a long-term resolution that could sustain investor confidence and restore stable trade flows.<\/p>\n
The agreement to establish a mechanism for continued dialogue was welcomed, but analysts stressed that structural issues\u2014such as intellectual property rights, state subsidies, and market access\u2014remain unresolved.<\/p>\n
Highlights:<\/p>\n
90-day tariff cut seen as start of a prolonged negotiation<\/p>\n<\/li>\n
Analysts warn supply chains still vulnerable to future shocks<\/p>\n<\/li>\n
Trade pact opens window for longer-term structural resolution<\/p>\n<\/li>\n<\/ul>\n
In a joint statement, both countries emphasized a commitment to continued economic engagement. This marks a shift from the previous narrative of strategic decoupling toward managed competition and cooperation. Bessent\u2019s comments that \u201cneither side wants to decouple\u201d highlight a recognition of the mutual economic interdependence that underpins global growth.<\/p>\n
Greer further noted that \u201cdifferences were not as large as maybe thought,\u201d underscoring the potential for incremental agreements on key trade and economic issues over the coming months.<\/p>\n
Highlights:<\/p>\n
Joint statement commits to continued engagement on trade issues<\/p>\n<\/li>\n
US acknowledges China\u2019s strategic economic role<\/p>\n<\/li>\n
Geneva summit seen as reset of US-China economic diplomacy<\/p>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"
Landmark Tariff Rollback as Washington and Beijing Seek Trade Truce In a major breakthrough after prolonged tensions, the United States and China on May 12 agreed to a 90-day truce on reciprocal tariffs, signaling a thaw in relations that had severely disrupted global supply chains. The agreement, reached following high-stakes negotiations in Geneva, will see […]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-8455","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-political-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/8455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=8455"}],"version-history":[{"count":2,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/8455\/revisions"}],"predecessor-version":[{"id":8458,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/8455\/revisions\/8458"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/8456"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=8455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=8455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=8455"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=8455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}