Global markets opened with positive numbers on Monday after China and the United States agreed to pause tariffs from both sides for 90 days.

CNN reports that the joint statement came after a weekend of negotiations in Switzerland between officials from the world’s two largest economies, during which both sides touted “substantial progress.”

The mutual tariff revisions will be imposed by May 14. Trump’s 20% fentanyl-related levies on China, imposed in February and March, will remain. However, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.

According to the joint statement, that means the U.S. will temporarily reduce its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%.

“The consensus from both delegations is neither side wants to be decoupled, and what has occurred with these very high tariffs … was an equivalent of an embargo, and neither side wants that. We do want trade. We want more balance in trade. And I think both sides are committed to achieving that,” US Treasury Secretary Scott Bessent said during a press conference on Monday. 

After the announcement, the Hong Kong Stock Exchange's benchmark index, the Hang Seng, soared 2.98% to score its best run in a year.

Meanwhile, leading European stock exchanges also recorded substantial gains on Monday. Milan rose the most, up 1.6%, followed by Paris (1.41%), Frankfurt (1.03%), Madrid (0.52%), and London (0.37%). The Euro Stoxx 50 index, which tracks the largest publicly traded companies in Europe, gained 1.78%.

Tariff consequences in the U.S.

Last week, workers at U.S. West Coast ports reported that not a single cargo ship had departed from China bound for the two major West Coast ports in the previous 12 hours—an occurrence not seen since the pandemic.

“This is cause for alarm,” stated Mario Cordero, CEO of the Port of Long Beach, last week. “We are seeing higher numbers than we witnessed during the pandemic” regarding cancellations and fewer vessel arrivals.

More than 63% of the cargo arriving at the Port of Long Beach comes from China, the highest proportion of any U.S. port.

With the latest negotiations, trade between both economies could start to stabilize, guiding away from the threat of having empty shelves in american supermarkets and stores. 

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