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Understand How the Partial Suspension of Tariffs Between the Two Largest Economies in the World Impacts Markets and May Influence New Multilateral Trade Decisions
On May 10, 2025, the United States and China announced the partial suspension of trade tariffs for 90 days, after negotiations held in Geneva. According to Xinhua and the Associated Press, the United States reduced tariffs on Chinese products from 145% to 30%. Simultaneously, China lowered tariffs on American goods from 125% to 10%, representing a bilateral reduction of 115 percentage points. The new policy will come into effect on May 14, 2025, as reported by the U.S. Department of the Treasury in an official briefing. Therefore, this is a temporary measure aimed at creating a favorable environment for future trade negotiations between the parties.
International Stocks Rise After Announcement of Partial Tariff Suspension
After the announcement of the tariff suspension, made on May 10, 2025, Asian and European stock markets showed gains. According to Bloomberg, Asian indices closed higher, reflecting a positive reaction to the partial truce between the U.S. and China. The Ibex 35, as reported by Reuters, reached its highest level since 2008, a result of positive short-term expectations. These effects demonstrate the immediate impact of the decision on global investor sentiment, especially in supply chains more exposed to international trade. However, analysts warn that lasting effects depend on maintaining dialogue between the countries and fulfilling commitments made.
U.S. and China Leaders Emphasize Importance of Dialogue and Criticize Unilateral Policies
During the announcement of the agreement, U.S. Treasury Secretary Scott Bessent stated that previous tariffs acted as unofficial barriers to bilateral trade. According to him, the tariff suspension represents a technical effort to rebalance trade and signals a willingness to cooperate. At the same time, Chinese President Xi Jinping, speaking at the IV China-CELAC Ministerial Forum, highlighted the risks of unilateral practices. According to Xi, hegemonic attitudes and coercive measures promote isolation and undermine global economic stability. As published by the state newspaper People’s Daily, Xi emphasized that mutual cooperation is the only possible path in broad trade contexts.
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The government launched this Monday (05/11) Tesouro Reserva, a public bond with profitability of 100% of the Selic, a minimum investment of R$ 1, and immediate redemption, aimed at emergency reserves. For now, it is only possible to invest through Banco do Brasil.
Fentanyl-Related Tariffs Remain in Effect and Demand New Negotiations
Despite the progress represented by the truce, the United States decided to maintain a 20% tariff on chemical substances linked to the fentanyl crisis. According to White House spokesperson Jamieson Greer, this measure is related to the need for stricter control over the export of chemical precursors. The government detailed this information at a joint briefing with the Department of the Treasury on the same day as the announcement of the partial tariff suspension. Thus, U.S. officials warn that structural points still lack consensus, requiring new rounds of technical dialogue. According to The Guardian’s assessment, maintaining this tariff reinforces the complexity of negotiations and the need for ongoing diplomatic actions.
Permanent Negotiation Channel Will Be Implemented to Prevent New Trade Conflicts
In order to strengthen communication between the two countries, the governments of the United States and China will create a permanent technical negotiation channel, as published by Huffington Post Spain. Scott Bessent and Jamieson Greer will lead the space for the U.S., while He Lifeng will do so for China, with alternating meetings in Washington, Beijing, and neutral locations. The goal is to avoid new imbalances, anticipate divergences, and establish criteria for future trade cooperation in strategic sectors. Additionally, representatives from the Ministries of Economy, Trade, and Foreign Affairs will participate directly in the technical sessions. Therefore, this is an institutional preventive measure aimed at ongoing alignment, according to the model agreed upon in May 2025.
Economic Stability Now Depends on Maintaining Dialogue and Structural Measures
According to the Financial Times, the truce offers minimal conditions to stabilize supply chains and improve cost predictability in sensitive markets. With inflation pressuring interconnected economies and demand fluctuating globally, this type of trade cooperation helps mitigate short-term risks. However, experts emphasize the need to accompany temporary agreements with medium- and long-term measures. Therefore, responsible authorities may consider establishing a permanent technical channel as an important institutional advance, especially in times of economic uncertainty. Additionally, direct dialogue between economic teams reduces noise and allows for more objective and technical negotiations.
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