The Trump administration and China have reached a significant agreement to pause their ongoing trade war for 90 days, a development confirmed by Treasury Secretary Scott Bessent. This deal, following urgent talks in Switzerland, reduces reciprocal tariffs by 115%. The agreement marks a crucial step as it signals both nations' desire to avoid decoupling. Notably, Bessent praised the Chinese response to fentanyl discussions, indicating increased awareness on their part. The market reacted positively, evidenced by a rise in China's yuan and strength in European markets, suggesting optimism around this newfound cooperation.
The consensus from both delegations this weekend was neither side wants a decoupling.
This is the first time the Chinese side understood the magnitude of what is happening in the US.
The truce peels back some of the harshest duties imposed under President Donald Trump's April tariff hike, which sent U.S. levies on Chinese goods soaring to 125%.
China's commerce ministry called the move a win for producers and consumers in both countries.
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