Trade Wars Truce: U.S. and China Slash Tariffs in Surprise Agreement

The United States and China have reached a surprising agreement to temporarily slash tariffs, igniting a surge in stock prices and the U.S. dollar. This move, announced after negotiations in Geneva, aims to quell the damaging trade war between the world's largest economies and stave off fears of a looming recession.

Under the agreement, the U.S. will reduce its additional tariffs on Chinese imports from 145% to 30%, while China will lower its tariffs on U.S. imports from 125% to 10% for a 90-day period. Though significant, the deal does not reinstate "de minimis" exemptions for low-value shipments from China and Hong Kong.

Economists have praised the deal for its potential to mitigate short-term global economic damage and reassure investors. However, U.S. Treasury Secretary Scott Bessent has emphasized that further discussions with Chinese officials are necessary to achieve a more comprehensive agreement, highlighting ongoing concerns like non-tariff barriers and currency issues.

(With inputs from agencies.)