US stock indices surged on Monday after the announcement of a trade deal and a lull in the trade tensions between the world’s two biggest economies.
The US and China announced a massive cut in reciprocal tariffs for 90 days amid efforts to contain trade tensions and reach a resolution.
According to the temporary agreement, the US will cut tariffs from 145% to 30%, including a 20% tariff related to fentanyl, while China will cut tariffs from 125% to 10%.
US Treasury Secretary Scott Bessent hailed the “very productive talks” with Chinese counterparts, and praised the place of negotiations besides the serene Geneva lake.
Bessent asserted the tariff pause will carry on for 90 days with both sides cutting tariffs by 115%.
Bessent said cutting tariffs below 10% wouldn’t be feasible, but the level specified by President Trump in early April at 34% would be a “ceiling”.
He said a partial removal of fentanyl tariffs is possible if China cooperates in finding a solution to the crisis.
On trading, Dow Jones surged 2.2% as of 15:31 GMT, or 913 points to 42,130 points, while S&P 500 added 2.3%, or 129 points to 5791 points, as NASDAQ powered up 3.1%, or 563 points to 18,495 points.
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