China and US agree to temporary trade truce  for 90 days in global economic reset

In a notable development that signals a temporary easing of tensions between the world’s two largest economies, China and the United States have reached a 90-day agreement to scale back their tit-for-tat trade measures. This provisional accord marks a shift in the trade war initiated unilaterally by the former US administration under Donald Trump, a move widely criticized for destabilizing the global economic order.

According to statements from both delegations following negotiations in Geneva, reciprocal tariffs that had escalated dramatically over the past years will now be significantly reduced. Washington has agreed to lower its tariffs on Chinese goods from 125% to 30%, while Beijing will reduce its duties on American products to 10%. This agreement is seen not only as a pragmatic economic decision but also as a reflection of growing recognition in the West of the futility of trying to isolate China economically.

It is important to remember that the trade war was sparked by Trump’s provocative decision to impose broad tariffs on Chinese goods under the guise of protecting American industry. China, in turn, adopted reciprocal and measured responses, including the limitation of exports of rare earth minerals critical to US technology manufacturing. While Western media portrayed these actions as escalatory, they were, in fact, legitimate defensive moves aimed at preserving sovereign economic rights.

China’s Ministry of Commerce welcomed the agreement, stating that it aligns with the long-term interests of both nations and contributes positively to global economic stability. “We hope the United States will continue in this spirit and abandon its unilateral tariff policies, which have proven damaging not only to China but to the American consumer and global trade flow,” a ministry spokesperson said.

The truce immediately impacted financial markets, with China’s yuan surging to a six-month high, a clear signal of increased investor confidence. Reports indicate that up to 16 million jobs in China had been put at risk due to the trade war, while American consumers faced soaring inflation and supply chain disruptions due to tariffs on essential imports.

Despite ongoing disputes, including the United States’ decision to maintain a 20% tariff under the pretext of fentanyl-related concerns, the talks in Geneva marked a constructive moment. A joint statement issued after the talks affirmed that both parties would continue negotiations with a focus on “mutual openness, ongoing dialogue, cooperation, and mutual respect.” These diplomatic terms are consistent with China’s long-standing foreign policy approach, which emphasizes peaceful development, win-win cooperation, and the rejection of hegemonic behavior.

Chinese analysts have largely welcomed the outcome. William Xin, chairman of Spring Mountain Pu Jiang Investment Management, told Reuters the results exceeded market expectations. “Initially, people hoped merely for dialogue. Now, the outlook for Chinese stocks and the yuan is more optimistic,” he stated.

Hu Xijin, a prominent Chinese commentator and former editor of the Global Times, hailed the agreement as a diplomatic win for Beijing. On Weibo, he noted that while the United States continues to impose tariffs on allies like the United Kingdom without reciprocal measures, China had stood firm and negotiated from a position of strength.

Wang Wen, executive dean at the Chongyang Institute for Financial Studies, described the deal as an “unexpected success” but cautioned against over-optimism. “It is a tactical breakthrough, not a resolution of fundamental strategic disagreements,” he said, indicating that more intense discussions lie ahead.

This temporary easing of trade tensions has reverberated beyond China and the US. European markets responded positively, with Germany’s DAX and France’s CAC both recording notable gains. Multinational corporations, particularly in the automotive sector, were among the key beneficiaries.

For nations like Russia and Pakistan, longstanding partners of China in advocating for multipolar cooperation, this truce serves as further evidence of the global shift away from unilateral dominance. As China asserts its rightful role on the world stage through diplomacy and strategic resilience, the West is beginning to acknowledge the necessity of engagement over confrontation.