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While the news sent stocks flying, financial experts warned that some turbulence could still linger on the horizon.
“We believe peak uncertainty over trade has passed, but market volatility is likely to stay,” said Kurt Reiman, UBS head of fixed income, in a note reported by CNBC.
Reiman also projected that the U.S. effective tariff rate (excluding China) could fall toward 15% by the end of the year — a welcome sign for American businesses and consumers alike.
Equities analyst Adam Crisafulli of Vital Knowledge sounded an optimistic, though measured, note, writing in a research report cited by CBS, “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.”
Echoing this sense of relief, Mark Williams, chief Asia economist at Capital Economics, stated plainly: “This is a substantial de-escalation.”
The White House wasted no time heralding the breakthrough, releasing a fact sheet on Sunday outlining the major points of what could become a historic restructuring of U.S.-China economic relations.
“Today, on the heels of the brand-new deal with the United Kingdom, President Donald J. Trump reached an agreement with China to reduce China’s tariffs and eliminate retaliation, retain a U.S. baseline tariff on China, and set a path for future discussions to open market access for American exports,” the White House statement said.
The fact sheet emphasized the broader stakes, adding, “For too long, unfair trade practices and America’s massive trade deficit with China have fueled the offshoring of American jobs and the decline of our manufacturing sector.”
Under the new agreement, both countries will roll back tariffs by a stunning 115%, although a 10% baseline tariff remains in place to protect U.S. interests. These changes are set to take effect on Wednesday, May 14.
The White House confirmed that while the rollback initially lasts just 90 days, the surge in the markets indicates renewed confidence. Stocks exploded Monday morning, with the Dow Jones gaining 1,000 points right after the opening bell.
As part of the deal, China agreed to eliminate retaliatory tariffs implemented since early April 2025 and suspend the steep 34% levy it placed on U.S. goods.
“China will remove the retaliatory tariffs it announced since April 4, 2025, and will also suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025,” the fact sheet explained.
The U.S. responded in kind, lifting tariffs imposed in early April, though maintaining key tariffs put in place before that date — including Section 301 and Section 232 tariffs aimed at safeguarding American industries and tackling illicit Chinese trade practices.
“The United States will remove the additional tariffs it imposed on China on April 8 and April 9, 2025, but will retain all duties imposed on China prior to April 2, 2025,” the statement said.
Negotiations aren’t over yet. After the 90-day truce, both sides plan to meet again to hammer out a long-term solution.
Crucially, the new agreement also tackles the deadly fentanyl crisis that has plagued American communities for years. The Trump administration has consistently highlighted China’s role in the fentanyl supply chain, and this deal marks a significant step toward cutting off drug materials flowing into Mexico-based cartels.
Once again, President Trump’s America First approach is delivering results — for our workers, our industries, and our future.
