Mon, 12 May 2025

Mon, 12 May 2025 Markets rise as US and China agree to slash tariffs

Shares jump as markets welcome news of a major de-escalation of the trade conflict between the two nations.

* The US and China have reached an agreement on trade terms, with significant cuts to tariffs imposed by both countries.
* The US will lower its tariffs on Chinese goods from 145% to 30%, while China will reduce its retaliatory tariffs from 125% to 10%.
* President Trump said the talks resulted in a "total reset" in trade terms between the two countries, and that he expected to speak with Chinese President Xi Jinping soon.
* Investors welcomed the de-escalation, with US stocks surging: the S&P 500 jumped over 3.2%, the Dow climbed 2.8%, and the Nasdaq surged 4.3%.
* The agreement includes a suspension of tariffs for 90 days, during which time both countries will re-evaluate their trade terms.
* China has also agreed to "suspend or remove" non-tariff measures against the US.
* Pre-existing tariffs on goods like steel and cars remain in place, but additional retaliatory tariffs have been cancelled altogether.
* The agreement is seen as a significant step towards resolving the high-stakes stand-off between the two countries.
* Economists warn that the trade war is far from over, with some Chinese companies treating the reprieve as temporary.
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