The United States and China have reached a provisional agreement in the context of the trade war.
The world’s two largest economies will bilaterally reduce tariffs imposed on most products by 115 percentage points.
The agreement will take effect on Wednesday (12) and will have a 90-day validity period.
The announcement was made late Sunday night, at the end of bilateral negotiations held over the weekend in Geneva.
This represents a much larger cut than expected. Tariffs imposed by the US on most Chinese products dropped from 145% to 30%.
Meanwhile, tariffs imposed by China on US products fell from 125% to 10%.
Initial expectations were that representatives of Donald Trump and Xi Jinping would arrive at a tariff level between 50% and 60%, a level that would maintain a situation close to a trade embargo.
“We have reached an agreement for a 90-day pause and a substantial reduction in tariff levels,” stated US Treasury Secretary Scott Bessent, before announcing the few details of the pact during a press conference.
However, it is not a definitive agreement. Observers are still awaiting details of what was agreed.
More information is expected to emerge in the coming hours.
US and Chinese representatives said they will continue negotiating in the coming weeks and months.
In any case, the speed with which Washington and Beijing reached a consensus was surprising.
The markets’ reaction to the agreement
The announcement of the agreement unleashed a wave of euphoria in financial markets.
Asian stock markets closed strongly higher this Monday.
European stock markets started the week on the same note.
On Wall Street, New York stock futures opened up more than 2%.
The dollar and oil are also gaining strength this Monday.
Source: www.seudinheiro.com, by Ricardo Gozzi