Global equity markets surged on Monday after the United States and China reached a 90-day truce in their ongoing trade war, offering temporary relief from steep tariffs that had disrupted nearly $600 billion in trade. While the ceasefire was welcomed by investors, it left key structural issues unresolved, prompting cautious optimism among analysts and businesses.
The agreement, concluded during weekend negotiations in Geneva, saw the US agree to slash tariffs on Chinese imports from 145% to 30%, while China reduced its own duties from 125% to 10%. The breakthrough, brokered by US Treasury Secretary Scott Bessent and senior Chinese officials, marked a significant de-escalation in tensions, though only for the short term.
Wall Street reacted strongly: the S&P 500 closed at its highest level since March 3, and the Nasdaq Composite climbed to its best performance since late February. The US dollar strengthened, while gold—typically a safe-haven asset—fell, signaling a renewed appetite for risk among investors.
Despite the market rally, experts cautioned that the truce is a temporary reprieve rather than a resolution. Core disputes—such as intellectual property rights, trade imbalances, and market access—remain unaddressed.
President Donald Trump, who has consistently criticized China for unfair trade practices and its role in the US fentanyl crisis, praised the deal as mutually beneficial.
“They’ve agreed to fully open up China,” Trump declared at a White House briefing. “It’s going to be fantastic for both countries—and a big step toward peace.”
However, Treasury Secretary Bessent acknowledged the limited nature of the agreement, emphasizing that the truce is meant to create space for further dialogue rather than settle longstanding tensions. “Rebalancing our trade relationship with China will take years,” he said.
Chinese state media also struck a more conciliatory tone following the deal. National broadcaster CCTV noted, “Economic and trade cooperation between China and the US has a deep foundation, great potential, and broad space,” signaling a shift from its earlier combative messaging.
While the 90-day pause has brought short-term calm to global markets, the path to a comprehensive trade agreement between the world’s two largest economies remains long and uncertain.
