Something Big Happened Immediately After US-China Announcement
President Donald J. Trump once again proved that American strength delivers results, as global stock markets soared Monday morning on the heels of a historic trade breakthrough with China — the world’s second-largest economy.
Following two days of intense negotiations in Geneva, Switzerland, the White House announced a sweeping agreement to mutually cut tariffs, pause retaliatory measures, and pave the way for future U.S. export expansion.
“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 stated in an official fact sheet.
The economic impact was immediate. According to CNN, Dow Jones futures jumped over 1,100 points, while the S&P 500 and Nasdaq surged 3% and 4% respectively, signaling a dramatic return of market confidence.
“This is a huge positive in the right direction for the markets,” analysts at Wedbush told The Wall Street Journal. “More progress has come out of these Swiss talks than even the bulls were hoping for heading into Friday night.”
Under the agreement, both the U.S. and China will slash tariffs by 115%, while retaining a strategic 10% base tariff to protect vital national interests. Notably, President Trump ensured that the United States maintains leverage by keeping in place key tariffs imposed under Section 301, Section 232, Most Favored Nation rules, and those tied to the fentanyl national emergency.
“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,” the White House declared.
Markets responded with enthusiasm. JPMorgan’s Asia Pacific chief strategist Tai Hui called the size of the reduction “larger than expected,” and noted that it would help shift the market into “risk-on sentiment in the near term.”
Although the agreement is set to last 90 days for now, it represents a substantial de-escalation of trade tensions under President Trump’s economic leadership. “This is a substantial de-escalation,” said Capital Economics’ chief Asia economist Mark Williams.
As CNBC reported, UBS’s head of fixed income, Kurt Reiman, noted, “We believe peak uncertainty over trade has passed, but market volatility is likely to stay.”
According to equities analyst Adam Crisafulli of Vital Knowledge, the deal is “an upside positive surprise,” even with some tariffs remaining in place. “[It’s] a substantial move that brings clarity to global markets.”
The agreement also touches on U.S. national security, particularly the fentanyl epidemic. President Trump has long held China partially responsible for providing precursor chemicals to Mexican drug cartels. The new framework opens the door to cooperative enforcement in stemming the flow of these deadly substances into the United States.
On May 14, both countries are expected to officially implement the agreement. China will suspend its retaliatory tariffs and non-tariff actions, while the U.S. will remove recently added April tariffs but retain the core of Trump’s tough-on-China trade strategy.
This comes on the heels of Trump’s recent trade pact with the United Kingdom, further demonstrating his administration’s capacity to deliver strong, America-first economic diplomacy in a volatile world.
Negotiations for a long-term deal will resume throughout the 90-day tariff freeze, alternating between the United States, China, or a neutral third-party location.
With this agreement, President Trump continues to fulfill his promise to put American workers, industry, and security first — and the markets clearly approve.