The agreement in the trade dispute between the USA and China led to a significant rise in the New York stock exchanges on Monday. The two largest economies in the world have agreed on a kind of “ceasefire” for an initial 90 days, during which mutual tariffs will be considerably lowered.
Details of the Tariff Reduction
Specifically, the USA will reduce its tariffs on Chinese goods from 145 percent to 30 percent, while China will lower its tariffs on US imports from 125 percent to 10 percent. This reduction of tariff rates by approximately 115 percentage points each has brought relief to the financial markets, as under the previous high tariffs, trade between the two countries had virtually come to a standstill, negatively impacting the global economy.
Stock Markets React Positively
The stock markets responded with a pleasing increase in share prices, which was also confirmed by positive signals from the trade sector – for instance, the stock price of Danish shipping giant Maersk rose by about 10 percent in early trading.
Long-term Perspectives
Furthermore, both countries plan to establish a consultation mechanism to regularly discuss economic and trade policy issues. This is intended to help resolve disagreements through dialogue and deepen cooperation.
For investors, this development is particularly relevant as it reduces the risk of further escalations and opens perspectives for stabilizing and potentially recovering global trade.
In summary, the agreement means:
- Temporary reduction of mutual tariffs for at least 90 days
- Significant reduction of US tariffs (145% → 30%) and Chinese tariffs (125% → 10%)
- Establishment of a regular consultation mechanism between both countries
- Positive response in the financial markets with price increases, especially on the New York Stock Exchange
These developments signal a de-escalation in the trade conflict with potentially positive effects on global markets and investor sentiment.