GENEVA: The United States and China said on Monday (May 12) they have agreed a deal to slash reciprocal tariffs as Washington and Beijing seek to end a trade war that has disrupted the global economy and set financial markets on edge.
Speaking after talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent told reporters the two sides had reached a deal for a 90 day pause on measures and that reciprocal tariffs would come down by 115 per cent.
The two biggest economies ended high-stakes trade talks on a positive note on Sunday, with both sides saying the talks were “constructive”.
Vice Commerce Minister Li Chenggang said on Sunday the joint statement would contain “good news for the world”, while Bessent had described “substantial progress” in talks.
Financial markets have been on edge for signs of a thaw in a bitter US-China trade war that has already begun to disrupt supply chains, prompt layoffs and raise wholesale prices.
Stocks and the US dollar rallied on Monday after the US and China said they had agreed on a 90-day pause on tariffs and reciprocal duties would drop sharply, giving investors some confidence that a full-scale trade war may have been averted.
Futures on the S&P 500 and Nasdaq jumped to trade up 2.8 per cent and 3.6 per cent, respectively, from gains of 1.5 per cent to 2 per cent previously, while in Europe, the STOXX 600 rose 1 per cent in early trading.
Markets in Asia rallied on Monday morning as investors welcomed news that weeks of trade turmoil could be finally coming to an end.
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