HAPPENING NOW: President Donald Trump’s crippling tariffs scored a massive win as America finally secured major concessions from China in a new trade agreement.
Financial markets responded positively to the announcement, with significant gains in U.S. futures markets.
Oil prices also rose significantly, with Brent crude futures up 2.7% and U.S. West Texas Intermediate futures increasing 2.9%.
Additionally, the dollar strengthened as well, with the ICE U.S. Dollar Index rising by 1.1%.
The Trump administration successfully negotiated a 90-day reduction of punishing reciprocal tariffs.
“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%,” explained Treasury Secretary Scott Bessent.
China has brought down its rate from 125% to just 10%, while America has maintained strategic 30% tariffs on Chinese goods from a whopping 145%.
The breakthrough deal was announced following intense weekend negotiations in Switzerland between U.S. and Chinese trade representatives.
This significant de-escalation comes after Beijing had essentially created a trade embargo against American goods through both tariff and non-tariff measures.
These included restrictions on exports of critical minerals needed for U.S. high-tech manufacturing.
“We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process,” Bessent stated, highlighting the administration’s strategy of negotiating from a position of strength.
“The consensus from both delegations this weekend was neither side wants a decoupling,” Bessent added, making it clear that America’s goal remains fair trade, not no trade.
Although the Chinese tariff dropped from 125% to just 10%, the U.S. maintained a 20% tariff specifically on products related to fentanyl production and trafficking.
This critical component of the deal protects American communities from the deadly synthetic opioid that has devastated families across the nation.
U.S. Trade Representative Jamieson Greer highlighted the impressive efficiency of the negotiations.
He noted, “It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as far as maybe thought.”
This swift resolution demonstrates the effectiveness of America’s tough stance with China under President Trump.
Importantly, Bessent mentioned that Chinese officials showed “increased understanding of the U.S. fentanyl crisis” during the talks—a crucial acknowledgment given China’s role as a primary source of fentanyl precursor chemicals.
This recognition represents a significant shift in China’s approach to America’s deadly opioid epidemic.
While the 90-day agreement represents significant progress, analysts caution that underlying issues like trade imbalances and intellectual property theft still require resolution.
Mark Williams from Capital Economics described the truce as a substantial de-escalation.
Still, he noted that the U.S. maintains higher tariffs on China than on other countries, which reflects the unique challenges China poses to American economic security.
The World Trade Organization welcomed the agreement as a positive step for the global economy.
However, the true test will be whether China follows through on its commitments during the 90-day negotiation period.
