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The breakthrough deal will see both nations slashing tariffs on each other’s imports by 115 percent. This adjustment sets U.S. tariffs on Chinese goods at 30 percent and Chinese tariffs on American imports at 10 percent, as reported by ABC. This reduction is set to last for 90 days while the two sides work toward a broader, long-term agreement.
European markets also felt the impact. The Stoxx 600 index rose 1 percent, Germany’s DAX reached a one-year high, and Hong Kong shares surged 3 percent, CNBC reported. “The magnitude of this tariff reduction is larger than expected,” said Tai Hui, chief market strategist for Asia Pacific at JPMorgan Asset Management.
Financial experts have noted the unexpectedly positive nature of the deal. Jordan Rochester, head of currency strategy EMEA at Mizuho Bank, called the development “much better news than expected” in a Monday morning note, adding that the “‘Sell America’ narrative [gets] squeezed.”
President Donald Trump, who recently signed a trade framework with Great Britain, had hinted at such a market rebound, saying, “You better go out and buy stock now,” and predicting the American economy would soon resemble a “rocket ship that goes straight up,” according to Fortune.
However, some analysts remain cautious, noting that uncertainty still looms. “We believe peak uncertainty over trade has passed, but market volatility is likely to stay,” wrote Kurt Reiman, UBS head of fixed income, in a Monday note, according to CNBC.
“While the lower tariffs are technically only in place for 90 days, and 30 percent is still quite large on an absolute basis, the news is clearly an upside positive surprise,” added Adam Crisafulli, head of Vital Knowledge, in a research note cited by CBS.
Mark Williams, chief Asia economist at Capital Economics, emphasized the scale of the breakthrough, calling it a “substantial de-escalation.”
