For the United States and China, it’s a very important agreement. • They will stop the intensifying trade war that former President Donald Trump began. This recent creation, revealed after talks in Geneva, is intended to reduce tariffs currently placed by each country. The agreement marks a crucial turning point in trade relations, especially after Trump announced duties on April 2 that led to tariffs as high as 125% on Chinese imports.
China responded by exerting maximum pain, applying tariff measures to a far greater number of goods. Uncertainty engendered by the current trade conflict is the most damaging element. Chinese estimates show that as many as 16 million jobs in China could be affected. At the same time, US consumers have experienced rising inflation and increased product shortages from sky-high inflation from tariffs on Chinese products.
The joint statement that came after the negotiations showed that both sides are committed to lowering tariffs. The joint statement underscored appreciation for ongoing communication and collaboration, indicating both sides’ desire to prevent additional escalation.
“This move meets the expectations of producers and consumers in both countries, as well as the interests of both nations and the common interest of the world,” – China’s ministry of commerce spokesperson
Wang Wen is executive dean of the Chongyang Institute for Financial Studies at Renmin University in Beijing. He touted the 90-day halt of tariff imposition as an unexpected victory in the Sino-US trade war negotiations. He acknowledged that while this agreement is a positive step, it does not resolve the deeper structural issues between the two nations.
“The result far exceeds market expectations. Previously, the hope was just that the two sides can sit down to talk, and the market had been very fragile. Now, there’s more certainty. Both China stocks and the yuan will be in an upswing for a while,” – William Xin, chair of Spring Mountain Pu Jiang Investment Management.
In fact, following the initial announcement, China’s yuan jumped to a six-month high, demonstrating unprecedented faith from the markets. Upward movement for Chinese stocks Chinese stocks are forecasted to see an upward trend in the coming weeks. Germany’s DAX index rose by 1.5%, underscoring widespread market optimism in response to that news.
US Treasury Secretary Scott Bessent was insistent about one thing — the tone of the negotiations has been highly respectful. He stressed that both delegations are committed to avoiding economic decoupling.
“The consensus from both delegations this weekend was neither side wants a decoupling,” – Scott Bessent.
The United States was deeply embattled, it seemed even to Chinese, in economic woes for the U.S. as Bessent noted. This is an important breakthrough in their thinking. He singled out China’s participation on matters like fentanyl during discussions in Switzerland to reporters.
As part of this agreement, China will drastically reduce its duties on US goods to 10%. At the same time, the US would cut its import tariffs on Chinese goods down to an average of 30%, using a tax deduction of 115%. These developments show a bipartisan readiness to de-escalate a costly feud and work toward more equitable trade practices.
Hu Xijin, a prominent commentator, characterized the agreement as a “great victory for China in upholding the principles of equality and mutual respect.” His comments highlight concerns in China that the negotiations have resulted in China making the best deals on the table.
Despite the positive advancements, experts caution that this agreement does not signify a resolution of underlying structural contradictions between China and the United States. In response, Wang Wen doubled down on this idea that friction and grave differences must be the expectation in future bilateral interactions.