The U.S. and China have agreed to a temporary truce in their trade war. On this Saturday’s meeting between Treasury Secretary Scott Bessentt and Chinese Vice Premier He Lifeng, the two sides made substantial progress toward de-escalating tensions.
According to reports, both sides agreed to reduce tariffs by 115%, bringing the U.S. tariff down from 145% to just 30%, while the Chinese reciprocal tariffs came down from 125% to only 10%.
These tariffs will be in effect for 90 days, allowing the two nations to better negotiate a fair rate by September.
The reduction in tariffs to just 30% represents pretty much a callback similar to pre-Liberation Day levels. By 2024, the U.S. imposed 100% tariffs on Chinese electric vehicles, 25% on lithium-ion EV batteries, and 50% on solar cells, pushing costs up for industries dependent on these imports. Steel and aluminum products carried a 25% tariff, while medical supplies like syringes and needles faced 50% levies. Even critical minerals such as cobalt and aluminum ore had a 25% tax, creating supply chain concerns for EV and semiconductor manufacturing.
Stock Market Back on Top
Stock Market Back on Top American stock markets took most of the brunt from the aggressive Liberation Day tariffs, as investors worried that the high trade fees would weaken corporate earnings and economic growth. The S&P 500 suffered historic setbacks, plunging from 5,671 on April 2nd—the day Trump announced his sweeping tariffs—to as low as 4,954 in the following days.
However, the recent tariff rollback to 30% has fueled a rapid market recovery, with the S&P 500 bouncing back above 5,690 after four consecutive green days. Investor sentiment has shifted bullish, with analysts now expecting the benchmark index to open above the level it was before Trump’s universal 10% tariff announcement—a major milestone in the market’s rebound.
Crypto Keeps Winning
Digital assets were a lot quicker to react to the favorable market conditions, as Bitcoin, Ethereum, and most other cryptocurrencies immediately turned bullish last week.
Bitcoin, as the leading crypto in the market, not only reclaimed its $100,000 margin but is now trading close to its ATH. Currently trading at $104,282 — $BTC is now only 4.3% below its highest ever recorded value.
Meanwhile, Ethereum saw even more substantial yields, gaining up to 28% in value in a single day last week. The altcoin not only reclaimed its psychological $2k level, but is now trading at $2,549—having added close to $1,000 per coin value in the span of one week.
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