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 the tariffs imposed on most products by 115 percentage points.
The agreement will take effect on Wednesday (12) and will be valid for 90 days.
The announcement was made on Sunday night, at the end of bilateral negotiations held over the weekend in Geneva.
This is a much larger cut than expected.
The tariffs imposed by the United States on most Chinese products fell from 145% to 30%.
The tariffs imposed by China on American products fell from 125% to 10%.
The initial expectation was that representatives of Donald Trump and Xi Jinping would reach a tariff level of around 50% to 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,” said US Treasury Secretary Scott Bessent, before announcing the few details of the pact in a press conference.
However, this is not a final agreement.
Observers are still awaiting details of what was agreed.
More information is expected in the coming hours.
Representatives from the US and China 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.
Market Reaction to the Agreement
The announcement of the agreement triggered a wave of euphoria in financial markets.
Asian stock markets closed strongly higher on Monday.
European stock markets started the week on the same note.
On Wall Street, New York futures indices opened up more than 2%.
The dollar and oil also gained strength on Monday.
Source: www.seudinheiro.com, by Ricardo Gozzi