United States/China: Customs truce and market relief.

The United States and China are suspending part of their punitive tariffs for 90 days.
The agreement, reached in Geneva, temporarily reduces American taxes on Chinese products to 30%, and Chinese taxes on American products to 10%, compared with the 115% imposed in recent weeks in a spiral of retaliation.

This gesture of appeasement comes after a tariff escalation initiated in April by Donald Trump, denouncing trade as unbalanced. The result was a trade stalemate that put markets under pressure.

As soon as the announcement was made, reactions were immediate: The Hong Kong stock market jumped 3%, and the dollar rallied against the yen and the euro, raising hopes of a lasting de-escalation.

But both countries remain cautious. Negotiations are continuing, and neither side wants their economies to “dissociate”, according to Washington.

While this truce is hailed by Beijing as “substantial progress”, “it does not resolve the core of the dispute: fairer access to the Chinese market, and an end to unilateral price hikes ”
The world is therefore still waiting for a more comprehensive agreement, and the markets are on hold.

source: Reuters