1. The 90-Day Truce: A Surprising De-escalation in the US-China Tariff War
In a move that stunned global markets and analysts alike, the United States and China agreed to a 90-day suspension of punishing tariffs. The announcement followed two days of intensive trade talks in Geneva, culminating in a joint statement emphasizing the importance of a “long-term and mutually beneficial” relationship.
Under the agreement, US tariffs on Chinese goods will be slashed from 145% to 30%, while Chinese levies on American exports drop from 125% to 10%. The financial markets responded swiftly: the Nasdaq Composite jumped 4.3%, buoyed by hopes of economic stabilization.
While both nations painted the deal as a diplomatic win, the swiftness of the agreement—less than two weeks after President Trump’s so-called “liberation day” tariff escalation—suggests urgency from at least one side. But the question remains: which side blinked first?
2. Behind Closed Doors: Who Conceded More Ground?
Public statements from both countries sought to maintain a posture of strength. Trump hailed the agreement as a “total reset,” while Chinese officials described the talks as “constructive.” However, economic indicators hint that the US may have had more to lose.
Analysts, including University of Neuchatel’s Piergiuseppe Fortunato, argue that the US economy’s growing vulnerability—coupled with rising inflation and recession fears—forced Washington’s hand. Fortunato notes that America made more significant tariff concessions and faces greater dependence on Chinese exports than vice versa.
Meanwhile, China’s exports surged by 8.2% in April, thanks to successful diversification efforts across Europe and Southeast Asia. Beijing’s resilience and reduced reliance on the US market may have allowed it to negotiate from a position of relative strength.
3. Looking Ahead: Temporary Relief or Prelude to a Bigger Clash?
While the 90-day pause offers short-term relief for businesses and consumers, its long-term effectiveness remains uncertain. Previous attempts at a comprehensive trade agreement, including the 2020 Phase One deal, fell short of expectations. China failed to meet promised US purchases by 43%, and tariff tensions reignited during the pandemic.
Treasury Secretary Scott Bessent hinted at the possibility of reviving purchase-based agreements, but economists warn such deals could backfire—much like they did during Trump’s first trade war. The US-China Business Council previously estimated 245,000 American jobs were lost during that round.
If negotiations falter again, tariffs could settle at historically high levels—15% to 20% or more—reshaping global trade patterns. The coming months will reveal whether the truce was a step toward reconciliation or merely a tactical pause in a broader geopolitical struggle.
