The world’s largest trade war just entered into a ceasefire. The United States and China announced a 90-day pause on the reciprocal tariffs arising as a result of Donald Trump’s ‘Liberation Day’ tariff scheme. Each side agreed to lower tariffs by 115 per cent so that the US tariff on China is now at 30 per cent and China’s tariff on the US stands at 10 per cent. This leaves tariffs between the two countries at around 40 per cent for the US and 25 per cent for China.
Stock markets rejoiced at the news with the Dow up 2.8 per cent and the S&P up 3.25 per cent. Investors are betting the deal means an end to large tariffs as well as recession worries in the United States. But as with most things to do with the Trump administration, there remains much uncertainty around both the details of the deal and what the next steps entail.
