On Monday, the U.S. and China agreed to a temporary reduction in most tariffs on each other’s goods, marking a considerable easing of trade tensions. As a result, major tech stocks caught in the trade war, such as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Nvidia Corp (NASDAQ:NVDA), climbed more than 4% during the pre-market trading session.
What Happened: The world’s two largest economies have agreed to a 90-day suspension of “reciprocal” tariffs, reducing them from 125% to 10%. However, the U.S. will maintain its 20% tariffs on Chinese imports linked to fentanyl, keeping the overall tariff level on China at 30%, reported CNBC.
As per the joint statement, Beijing has also agreed to suspend or lift all non-tariff countermeasures imposed since April 2, including sanctions on certain U.S. companies and export restrictions on key minerals, as per the South China Morning Post.
This development comes after intensive trade talks between U.S. and Chinese representatives in Switzerland, with U.S. Treasury Secretary Scott Bessent expressing satisfaction with the discussions, stating, “We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process.”
"Neither side wants a decoupling,” emphasized Bessent.
Both countries have signaled their commitment to ongoing dialogue on economic and trade policy. Earlier in the day, the official handle of the Chinese Embassy in the U.S. stated, “high-level meeting on economic and trade affairs were in-depth, candid and constructive,” citing Chinese Vice Premier He Lifeng.
Why It Matters: The weekend talks in Geneva, Switzerland, marked the first formal negotiations between the two superpowers since U.S. President Donald Trump imposed new tariffs of 145% on China earlier this year. Trump had stated that he "might speak with Chinese President Xi Jinping" based on the outcome in Switzerland.
This agreement comes in the wake of renewed trade negotiations between the two nations, as reported. The talks, described by U.S. officials and President Trump as a potential “reset,” aimed to reduce tariffs and reestablish more stable trade terms.
Despite the diplomatic tone, deep-rooted differences remain, particularly around technology, subsidies, and market transparency. The outcome of these talks is critical not just for U.S.–China relations, but for global trade stability in the months ahead.
Investors were encouraged by the news of the tariff relief. During the pre-market trading session, shares of Apple (NASDAQ:AAPL), Nvidia Corp (NASDAQ:NVDA) climbed above 4%, while Tesla Inc. (NASDAQ:TSLA) and Amazon Inc. (NASDAQ:AMZN) rose more than 6%. Meanwhile, Boeing (NYSE:BA) rose 3.5%.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.