Trump Lands 90-Day Tariff Truce Between US and China

Trump pulls off the impossible: a 115% tariff reduction with China, proving once again that no one negotiates trade better than the master dealmaker.

At a Glance

Trump administration negotiated a 90-day tariff truce with China, slashing U.S. tariffs from 145% to 30% and Chinese tariffs from 125% to 10%
Global markets rallied on the news with significant gains in European and Asian markets while Wall Street anticipates new market highs
The 90-day window maintains pressure on China while establishing a formal mechanism for ongoing trade discussions
Trump maintained the 20% tariffs on fentanyl-related goods, keeping pressure on China regarding illegal drug trafficking
Analysts call the deal a “dream scenario” and a “huge win” that exceeded market expectations

America’s Dealmaker-in-Chief Returns to Form

While the media spent four years telling us Trump’s trade policies would crash the economy, the markets are celebrating his return to the negotiating table. Following extensive trade talks in Geneva, Switzerland, the United States and China have agreed to slash tariffs by a staggering 115 percentage points for an initial 90-day period. This major de-escalation in the trade war sees American tariffs on Chinese imports dropping from a punishing 145% to a more moderate 30%, while China’s retaliatory tariffs fall from 125% to just 10%. The agreement represents exactly the kind of tough but practical dealmaking that became the hallmark of Trump’s first term.

The beauty of this deal is in its strategic timing. Rather than rushing to a permanent agreement that could leave America vulnerable, Trump secured significant concessions while keeping the pressure on with a 90-day timeline. Both nations agreed to implement these changes by Wednesday, with a formal mechanism established for ongoing discussions led by Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer. The limited timeframe ensures China can’t simply run out the clock – they must continue negotiating in good faith or face the consequences.

Markets Celebrate as Economic Uncertainty Drops

Wall Street couldn’t be happier with the deal. Global stocks immediately rallied following the announcement, with substantial gains across European and Asian markets. The effective U.S. tariff rate on Chinese imports is reduced from a crippling 108.8% to a much more reasonable 27%. Meanwhile, the U.S. dollar index surged by 1%, and the yield on the 10-year Treasury note increased by 6 basis points – both clear signs of renewed economic confidence. For everyday Americans, this could mean lower prices on consumer goods and increased economic stability, precisely what families need amid still-skyrocketing inflation.

Wall Street strategists are now predicting further stock rallies, with U.S. equities expected to outperform their European counterparts in the short term. Trade between the two economic superpowers is anticipated to resume swiftly, reversing the decline in freight and shipping volumes observed since April. The temporary agreement is also expected to boost inventory increases and demand for container freight, which could help alleviate supply chain bottlenecks that have contributed to price increases across various sectors of the economy.

Trump’s Strategy: Firm but Fair

What’s particularly noteworthy is how Trump maintained the 20% tariffs on fentanyl-related goods. By keeping pressure on China regarding the flow of deadly narcotics into the United States, Trump is showing that he won’t sacrifice American lives for economic gain. This balanced approach – reducing general tariffs to help businesses and consumers while maintaining targeted pressure on areas of national security concern – represents the kind of nuanced policy rarely seen during the Harris-Biden administration, where virtue signaling routinely trumped practical solutions.

“Today’s announcement even exceeds our constructive expectations” – strategists at Deutsche Bank

What we’re witnessing is a master class in the art of the deal. Remember when the media mocked Trump’s aggressive tariff strategy? Now, those same tariffs have become powerful leverage, forcing China to the negotiating table and extracting real concessions. The agreement emphasizes the importance of building a sustainable, long-term, and mutually beneficial economic relationship – diplomatic language that translates to “America won’t be taken advantage of anymore.” The 90-day window ensures continuous progress while giving both sides breathing room to work toward more permanent solutions.