On May 12, 2025, the United States and China announced a significant agreement to reduce reciprocal tariffs by 115% and implement a 90-day pause on new trade measures. This development, following talks in Geneva between U.S. Treasury Secretary Scott Bessent and Chinese officials, aims to de-escalate a prolonged trade war that has disrupted global markets .
The agreement has positively impacted financial markets. The U.S. dollar strengthened against safe-haven currencies like the yen and Swiss franc, and China’s offshore yuan appreciated by about 0.2% . Additionally, European stocks rose, with Germany’s DAX index climbing 1.6% .
Commodities also responded to the news. Oil prices increased, with Brent crude futures up by 0.67% to $64.34 per barrel, and U.S. West Texas Intermediate crude rising by 0.79% to $61.50 . Conversely, gold prices declined by 1.4% to $3,277.84 per ounce, as investor demand for safe-haven assets diminished .
This agreement marks a pivotal step toward stabilizing global trade relations and easing economic tensions between the world’s two largest economies.
Source: Reuter
