Stock markets soared on Monday after President Trump declared that recent talks had led to a “total reset” in trade relations with China, somewhat easing the ongoing high-stakes tension between the two nations.
Negotiations in Switzerland culminated in significant reductions of the tariffs imposed since January by both parties.
The US will slash its tariffs from 145% to 30%, while China will reduce its retaliatory tariffs on American goods from 125% to 10%.
Trump noted that some levies are merely suspended and could resurface in three months if progress stalls. However, he expressed optimism that they will not revert to the previous high levels.
Investors responded favorably; the S&P 500 index surged over 3.2%, while Dow and Nasdaq also saw considerable gains.
Nonetheless, the impacts of the trade war are becoming apparent, with US ports reporting a decline in ships from China and factories in China facing reduced orders.
Tat Kei, a Chinese exporter, welcomed the agreement but remains cautious, fearing further challenges ahead. “For now, it feels like a temporary reprieve,” he remarked.
In summary, while this agreement brings short-term relief, the path to a long-term resolution remains uncertain.
Vocabulary List:
- Negotiations /nɪˌɡoʊ.ʃiˈeɪ.ʃənz/ (noun): Discussions aimed at reaching an agreement.
- Tariffs /ˈtær.ɪfs/ (noun): Taxes imposed on imported goods.
- Retaliatory /rɪˈtæl.i.ə.tɔːr.i/ (adjective): Involving retaliation; responding to an action with a counteraction.
- Optimism /ˈɑːp.tɪ.mɪ.zəm/ (noun): Hopefulness and confidence about the future or the successful outcome of something.
- Apparent /əˈpær.ənt/ (adjective): Clearly visible or understood; obvious.
- Reprieve /rɪˈpriːv/ (noun): A cancellation or postponement of a punishment.
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