Gold Prices Fall and Markets Surge as US and China Agree to Slash Tariffs for 90 Days

The United States and China have reached a breakthrough agreement to significantly reduce mutual tariffs for a 90-day period following negotiations in Geneva, according to a Bloomberg report.

U.S. Treasury Secretary Scott Bessent and China’s Commerce Minister Li Chenyang jointly announced the deal, under which:

• The U.S. will lower tariffs on Chinese goods from 145% to 30%;
• China will reduce its tariffs on American goods from 125% to 10%.

"After these initial steps, both sides will establish a mechanism to continue discussions on economic and trade relations,” a joint statement published on the White House website reads.

Secretary Bessent emphasized:

“Neither side wants a rupture in relations. We want trade—balanced trade—and both parties are committed to that goal.”

Context: Trade War Tariffs Under Trump

On April 2, President Donald Trump announced sweeping tariffs against dozens of countries. While most were suspended in favor of a 10% baseline rate, tariffs on China remained and climbed to 145%. Beijing responded with retaliatory tariffs up to 125%, calling Washington’s actions a “mistaken practice.”

The U.S. justified its tariffs as a tool to correct trade imbalances and incentivize manufacturing repatriation. Trump also linked the measures to fentanyl exports from China.

According to The Wall Street Journal, the policy backfired diplomatically: it “shook global confidence in the U.S.” and was seen as a “gift” to Chinese President Xi Jinping, who gained domestic political capital in the face of external pressure.

Agreement Takes Effect May 14

The 90-day tariff reduction agreement will begin on May 14, 2025, per the official document posted by the White House.

Market Reaction to U.S.-China Tariff Truce

The announcement had a strong impact on global markets:

• U.S. Stock Futures (as of 10:37 Moscow time):
• S&P 500: ▲ 2.82% to 5,819.5 points
• Dow Jones: ▲ 2.22% to 42,164.9 points
• NASDAQ 100: ▲ 3.65% to 20,794.4 points

Commodities:

• Gold fell sharply by 3.52%, dropping to $3,222.9/oz
• Brent Crude rose 3.74% to $66.3/barrel on the ICE exchange

Currencies:

• U.S. Dollar Index (DXY) jumped 1.26%, peaking at 101.691—its highest since April 10
• Bloomberg Dollar Spot Index rose 0.7%, hitting a high not seen since April 14
• Euro dropped 1.1% to $1.1122, facing its worst trading day of the year

Bloomberg analysts noted the euro is approaching a critical technical zone, casting doubt on hedge fund strategies aiming for $1.15–$1.20 later this year.

Global Markets Also Rally

Asian and European markets echoed the surge:

• Hang Seng (Hong Kong): ▲ 2.98%
• CSI 300 (China): ▲ 1.16%
• FTSE 100 (UK): ▲ 0.49% (11:48 am)
• CAC 40 (France): ▲ 1.2%