Following pivotal trade negotiations in Geneva, the United States and China have mutually agreed to substantial tarif reductions, with China reducing tariffs on American products from 125% to 10%, while the US cuts tariffs on Chinese imports from 145% to 30%. These tariff changes are set to last for 90 days.
What Drives China’s Tariff Decision?
This drastic reduction by China aims to break the cycle of retaliatory tariffs that have marked the trade relations of the two countries. Motivated by global inflation and internal market pressures, China seeks to address rising production costs and retain international businesses within its borders.
How Does the US Benefit Economically?
The United States’ decision to lower tariffs reflects a strategy to recalibrate its trade framework in alignment with shifting global economic priorities. In doing so, the US hopes to stabilize economic relations and reinforce supply chain balance, reducing uncertainties affecting short-term markets.
Mutual tariff reductions by these two largest economies are poised to invigorate the global trading system, enhancing supply chain fluidity and potentially easing tensions in international commerce.
This global trade development sent ripples across different sectors, notably the cryptocurrency market. Bitcoin (BTC) notably registered a quick rebound, appreciating 1.88% to rise from $104,000 to $106,000.
Ethereum (ETH), leading the charge among altcoins, experienced an impressive 2.86% spike in just 24 hours, hitting a value of $2,568. This rally extended across various altcoins, reflecting a broad-based uplift in the cryptocurrency landscape.
As a result of these developments, cryptocurrency market capitalization witnessed a 2.13% jump, climbing to $3.40 trillion. Observers anticipate the continuation of this positive momentum supporting the market’s upward trajectory.
The tariff adjustments by the US and China have significant implications. They represent a key moment in easing trade friction while simultaneously offering a boost to global markets, particularly seen in the cryptocurrency sector.
