The US-China trade war has temporarily ceased fire! Tariffs were drastically reduced to 10%, and the market rebounded across the board

The two largest economies in the world finally breathe a sigh of relief! The United States and China reached a major trade agreement on Monday, announcing a "temporary suspension" of most tariffs on each other's goods, symbolizing a clear easing of their tense trade relations in recent years. This move immediately injected confidence into the global market, with US stock futures rising across the board, and the US dollar index and European stocks strengthening simultaneously.

Tariff "Cooling Down": Bilateral Tax Rates Dropped from 125% to 10%

According to the agreement, the US and China agreed to reduce retaliatory tariffs from a high of 125% to just 10%. However, the US will maintain a 20% additional tariff on Chinese imported products related to fentanyl, meaning the overall tariff level for Chinese goods will be around 30%.

US Treasury Secretary Scott Bessent stated at a press conference: "We have reached a 90-day suspension agreement and substantially reduced tariffs. Reciprocal tariffs will be simultaneously reduced by 115%."

Key Negotiation Location: Geneva Adds a "Peaceful Atmosphere" to Negotiations

This breakthrough agreement was finalized during high-level talks held on the shores of Lake Geneva in Switzerland. Bessent noted that the location choice helped promote a positive, balanced dialogue result, "I believe that choosing Geneva brought great calm and balance to this highly constructive process."

Both sides also indicated that they will continue to dialogue on economic and trade policies, suggesting that bilateral relations may gradually warm up.

Stocks and Forex Rise: Market Quickly Responds to Positive News

Investors reacted enthusiastically to this "tariff truce", with US stock futures rising across the board:

• Nasdaq futures surged 3.6%

• S&P 500 futures rose 2.8%

• Dow Jones Industrial Index futures soared nearly 1,000 points, a 2.3% increase

Additionally, the ICE US Dollar Index, which measures the dollar's performance against a basket of global currencies, rose 1.3% to 101.63, indicating a return of investor confidence.

In Europe, the pan-European Stoxx 600 index also rose 0.7% in early trading, reflecting the global capital market's positive response to the easing of US-China trade tensions.

Temporary Ceasefire or Starting Point for Long-Term Easing?

Although this agreement is only a 90-day "temporary truce", it is enough to bring a glimmer of hope to the long-term tense US-China trade war. Investors and the business community will continue to watch whether both sides can reach a more long-term, structural new trade agreement in the next three months. Against the backdrop of global geopolitics and supply chain restructuring, the direction of US-China trade dialogue will inevitably influence market dynamics and corporate decision-making rhythms.