This truce comes amid prolonged trade tensions that have disrupted supply chains, slowed economic growth, and created volatility in global markets.
Both nations confirmed a mutual reduction in tariff rates: the U.S. will reduce its tariff rate on Chinese goods from 145% to 30%, and China will lower its rate on U.S. goods to 10%. In total, approximately 91% of tariffs will be cancelled, with an additional 24% suspended for the 90-day period—effectively rolling back tariffs by 115 percentage points on each side.
This move is seen as a critical step in de-escalating one of the most impactful trade conflicts in recent history. According to official statements, both sides reaffirmed that they do not seek economic decoupling and are committed to finding a more balanced and stable trade relationship moving forward.
While the agreement provides immediate relief to global markets, it does not reinstate the de minimis exemption previously used to allow small-value shipments from China and Hong Kong to enter the U.S. duty-free. The removal of this exemption remains in effect, impacting cross-border e-commerce shipments.
Following the announcement, financial markets responded positively. Major equity indices saw sharp gains, with futures for the S&P 500 rising 2.6% and the Dow Jones Industrial Average increasing by 2%. Commodity prices also jumped, including a $1.60 increase in oil prices per barrel, and the U.S. dollar strengthened against major global currencies.
However, the agreement remains provisional, with tariffs only suspended temporarily. The current resolution does not eliminate underlying trade disagreements, and significant uncertainty remains about the long-term direction of U.S.–China relations.
For businesses and investors, the temporary truce offers breathing room but reinforces the need for ongoing vigilance. Trade policies continue to evolve, and long-term planning must account for geopolitical and regulatory developments that can affect pricing, supply chains, and investment strategies.