After intense negotiations in Geneva, the US and China have agreed to a 90-day pause in their escalating tariff war. The truce, announced Monday, rolls back extreme tariff rates that had severely impacted trade and consumers. Both countries aim to create a framework for future talks, though significant economic and political challenges remain.

BulletsIn

• US-China suspend tariffs for 90 days post-Geneva talks
• Prior to truce, US tariffs on China hit 145%, China retaliated with 125%
• Base tariffs now reduced to 10% for both, US keeps 20% on fentanyl-related imports
• US cited $1.2T trade deficit as main reason behind tariff hike
• Tariffs drove up prices, pushed US economy toward recession and stagflation
• China’s economy grew 5.4% in Q1, while US contracted
• China’s trade surplus rose by $96B in April, despite drop in US-bound exports
• China now faces same tariffs as US allies like UK, Australia
• Markets responded positively: stock rise, oil up, gold/bonds down
• Truce is temporary; formal trade deal talks still pending and could be tense