We understand that US Treasury Secretary Scott Bessent and US Trade Ambassador Jamieson Greer conducted these productive negotiations with appropriate Chinese officials in Geneva. The temporary truce resulted in a major 90-day ceasefire of the continued trade battle between the two economic titans. When finalized, this agreement would be a watershed moment in the trajectory of US-China relations. Both countries have agreed to unilaterally reduce tariffs by a historical record of 115%.
Under the terms of the agreement, the US will reduce tariffs on Chinese imports from a trade-weighted 145% to just 30%. In exchange, China will reduce its tariffs on US products from 125% to 10%. These changes are intended to reduce the friction and anger and open a path toward a more productive conversation in the future. Bessent reiterated that the negotiations flourished in an atmosphere of goodwill and respect. Above all else, he focused on how important collaboration between the two countries was to their success.
The trade pause is widely viewed as a significant de-escalation in the trade war that has strained global markets for months. Transportation advocates are hopeful that this deal sets the stage for more substantive negotiations in the months ahead. Bessent explained, “What I’d say was the shared perspective from each delegation this weekend was that neither side wants a decoupling.”
Throughout the negotiations, Bessent was effusive about the Swiss government’s friendly reception. In doing so, he recognized their critical importance in serving as conveners to help guide these important conversations. The discussions concluded on positive terms, touching on a significant rally in global stock markets. London, Aug 18 Mining shares such as Glencore and Anglo American were among the best performers.
Market strategist Bill Blain had this to say about the new agreement, calling it the agreement of a “classic bully tale. He called attention to the fact that tariffs are still significantly higher than they were before this past January. Yet the cut represents a dramatic reversal in approach. He noted that this morning’s announcement should galvanize a dawning global consensus. In his view, the only real barking dog among US leaders—Trump, rather than making real threats—only bites dogs of its own size.
The fallout from the US-China trade talks reaches well beyond US-China bilateral relations, influencing global trade dynamics. Greer outlined the Trump administration’s agenda for transforming global trade in between the discussion sessions. He concluded with a powerful reaffirmation of interest in continuing to develop win-win collaboration. In reaction to the trade agreement, a spokesperson for China’s Ministry of Commerce expressed hope and optimism. They called on the US to continue this progress, stating, “We sincerely hope that as with China, the US can have this positive progress, redress and make up for mistakes of unilateral tariff hikes, and promote the development of mutually beneficial cooperation.”
The market response to the trade agreement has been beyond encouraging. Russ Mould noted that “markets have welcomed the tentative US-China trade agreement with open arms,” reflecting investor optimism. Dario Perkins highlighted that equities have rebounded despite higher tariffs than at the start of the year, pointing to persistent uncertainty about future developments.
Bessent’s role as a spokesperson for Trump’s new administration has garnered attention for his ability to present policies in a coherent and market-friendly manner. Perkins said that Scott Bessent has been the one to fill the void in becoming the chief apologiser for Trump 2.0. He credited Bessent for his ability to take crazy policies and make them sound intellectually consistent and exciting to the market.
The agreement’s success depends on both parties’ willingness to continue to engage in constructive conversation and collaboration. As Bessent confirmed, nobody on either side wants a full economic divorce. The next three months will be critical. Either way, both nations will be strongly motivated to consolidate this pause and find new areas of mutual goodwill to build upon.