Description: Following the trade negotiations this weekend in Geneva, US Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng concluded a massive reduction of reciprocal tariffs and a general pause on tariffs for 90 days. China would slash their tariffs on US imports from 125% to 10% while the US has agreed to reduce the tariffs on Chinese imports to 30% with baseline tariffs still remaining active of 25%. The agreement has surpassed any expectations or potential projections for posturing by both countries regarding the tariffs as the global markets stock indexes surged rapidly. S&P 500 Global stood at 2.7% while other indexes such as the NASDAQ 100 Future marked an increase to 3.7%. Gold assets reliability was slightly reduced as the US dollar regained its traditional currency values preexisting the tariffs. Before the trade negotiations in Switzerland trade between the two largest global economies reached a virtual standstill which was unexpectedly unlocked as representatives from China and the US rapidly reached mutually beneficial resolutions. Uncertainty still persists as no terminal solution to the trade dispute was outlined, however, fundamental differences have been surpassed, and the countries are expected to devise a comprehensive plan to continue bilateral trade.
Impact: The ambitious signals from the Geneva negotiations rapidly resulted with an agreement indicating bilateral economic codependence between the world’s two largest economies. The initially agreed reduction of tariffs represents a substantially positive ground for further developing a bilateral trade agreement which would be beneficial to both countries, incorporating crucial disputes such as the fentanyl trade. The latest development gave no leverage to either side as the devastating consequences of the tariff war more or less impacted both countries in the same way. The US would aim towards reducing China’s export – driven economy and introduce the country fully into the global markets in order to make it more dependent and vulnerable. China on the other hand despite agreeing on initial concessions would continue to incorporate the newly introduced foreign policy assertiveness towards differentiating its geoeconomic portfolio, strenghtening partnerships with equivalently alligned countries which would potentially serve as a backstop against further trade blackmail from the US.