President Donald Trump has suggested reducing tariffs on China from 145% to 80% as trade talks loom. This announcement came through a post on social media.
The markets responded positively after the U.S. and China revealed a temporary trade agreement, which includes suspending most tariffs on each other for 90 days. Starting Wednesday, the U.S. will lower China’s tariffs from 145% to 30%, while China will cut U.S. tariffs from 125% to 10%.
However, Linsongg, chief economist at the Bank of Netherlands, noted that this adjustment was more significant than anticipated and cautioned that the negotiation process might not be straightforward.
As the 90-day period progresses, market analysts, like Gina Volbin of Volbin Wealth Management Group, expect some volatility. She mentioned that if the market remains stable, it could represent a substantial win for Trump and investors.
By 9:58 AM ET, the Dow surged by 2.46%, or 1,013.82 points, reaching 42,263.20. The S&P 500 increased by 2.58% (145.86 points) to 5,805.77, while the Nasdaq saw a jump of 3.45% (617.79 points) to 18,546.70. The 10-year Treasury yield also rose to 4.449%.
China’s Deputy Prime Minister, Lifeng, characterized the recent talks as “fun, detailed, and constructive,” claiming there was significant progress and consensus reached during their Sunday meeting.
Treasury Secretary Scott Bescent expressed hopes for ongoing discussions with Chinese officials in the near future. He mentioned on CNBC’s “Squawk Box” that they plan to have a follow-up meeting soon.
The agreement with China is considered a welcome relief for investors concerned about the previous high tariffs, which could have severely impacted trade and the U.S. economy.
“Most Preferred Countries” for Drug Pricing
Trump also announced plans for an executive order aimed at implementing “most preferred national” policies for drug pricing, reviving an initiative from his first term. He expressed intentions to lower prescription costs significantly—by as much as 30% to 80% promptly.
In a post on Truth Social, Trump stated, “I will implement the policy of the most preferred country where the U.S. pays the same price as the country that pays the lowest price in the world.” He believes this could lead to dramatic reductions in healthcare costs for American citizens.
Cryptocurrency
In other news, Michael Saylor, the Founder and Executive Chairman of MicroStrategy, disclosed that the company purchased 13,390 Bitcoin for approximately $1.34 billion from May 5 to May 11. As a result, MicroStrategy has gained notable recognition in the cryptocurrency space.
Bitcoin has recently seen a slight uptick, rising by 0.27% to $104,319.50.
