US, China Ease Trade War More Than Expected

The US and China cooled off their trade war in a big way on Monday—more than expected—and the stock market was jumping in response:

• Both nations agreed to cut the "reciprocal" tariffs on each other from 125% to 10%, reports the Wall Street Journal.
• The US will keep a 20% tariff in effect on Chinese goods over fentanyl, leaving the total US tariffs on Beijing at 30%, reports CNBC.

• These cuts will remain in effect for at least 90 days as talks continue between the two nations, per the AP.
• Stock market futures were surging on the news. Dow futures were up more than 900 points early Monday, or 2.2%, while the S&P 500 (2.8%) and the tech-focused Nasdaq (3.8%) were up by even greater percentages. Global markets jumped as well, with Hong Kong's main index up 3%.
• "The consensus from both delegations this weekend is neither side wants a decoupling," said US Treasury Scott Bessent after two days of talks in Switzerland with his Chinese counterparts. "And what had occurred with these very high tariffs ... was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade."
• "From China's perspective, the outcome of this meeting is a success, as China took a tough stance on the US threat of high tariffs and eventually managed to get the tariffs down significantly without making concessions," Zhiwei Zhang of the Hong Kong investment firm Pinpoint Asset Management tells the New York Times.

(More tariffs stories.)