China and the United States have agreed to ease tensions in their trade dispute by temporarily lowering tariffs on each other’s goods. This decision came after weekend talks held in Switzerland.
The United States will reduce its high tariffs of 145% on Chinese products down to 30% for the next 90 days. In return, China will lower its tariffs on American goods from 125% to 10% during the same time, according to official government statements from both countries.
U.S. Treasury Secretary Scott Bessent said during the meeting in Geneva that both sides agreed they don’t want to separate their economies completely.
The announcement had a big impact on the stock market. Many shares went up, especially in the tech sector. In Hong Kong, shares of Alibaba rose over 6%, Tencent climbed nearly 5%, and electric vehicle company Xpeng jumped more than 10%.
Guo Shan, a partner at a research firm in Shanghai, said that the results of the meeting were better than expected. Many investors had assumed that talks would drag on and become even more difficult. But the U.S. appeared to back down due to growing economic pressure.
The Trump administration has been facing strong criticism from Wall Street as stock markets have become unstable during the trade conflict. Big U.S. companies have warned that store shelves could soon be empty because they’ve stopped ordering from China due to high tariffs and uncertainty.
China is also feeling the pressure. Shen Meng, an investment banker in Beijing, said that a trade war with the U.S. could do just as much harm to China’s economy.
Both sides now have 90 days to find longer-term solutions. This pause offers a chance to calm markets and work toward a better trade relationship.
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