US and China Pause Tariff War After "Substantial Progress" in Weekend Talks

The United States and China have agreed to pause their tariff war after "substantial progress" was made during weekend talks between senior diplomats in Geneva, Switzerland. The decision has prompted gains in global stock markets, with the S&P 500 rising by 3%. However, US President Donald Trump has hinted at another possible trade policy announcement, signaling that he could change the way the US purchases pharmaceutical products.

Key Takeaways:

• The US and China have agreed to reduce their tariffs rates substantially for 90 days, with the US imposing a 10% tariff on imports from China and a 30% rate on Chinese exports.
• The tariff rates had increased to 125% and 145% before the reduction, which was announced after a 90-day delay.
• The US will maintain all other measures placed on China, including those applied during Trump's first administration, while a "positive path forward" on tackling fentanyl smuggling has been reached.
• The White House has agreed to establish a mechanism for economic and trade consultations with China.
• Trump has hinted at a possible change in US pharmaceutical policy, claiming that "trillions of dollars" are pouring into the country as a result of his administration's measures.

Statistics:

• The S&P 500 rose by 3% after the announcement.
• The Nikkei and FTSE 100 saw smaller gains.
• Shares in the shipping companies Maersk and Hapag-Lloyd leapt by over 10%.
• The price of gold fell by 3%.
• Oil futures rose by 2.5%.

Sources:

• Institute of Export and International Trade
• White House (social media post)
• US Treasury Secretary Scott Bessent
• Chinese Vice Premier He Lifeng
• US Trade Representative Jamieson Greer