- The US-China tariff agreement lifts market sentiment worldwide.
- Bitcoin rises amid improved risk appetite, nearing $109,000.
- The temporary tariff relief reduces geopolitical tensions temporarily.
US and China have agreed to a 90-day tariff reduction beginning May 14, 2025. This announcement, led by US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, has sparked significant movement in both equity and cryptocurrency markets.
The unexpected tariff agreement between the US and China sparks hope for a boost in market liquidity, significantly impacting global equities and cryptocurrency markets.
The US has reduced tariffs on Chinese goods from 145% to 30%, while China reciprocates by lowering tariffs on US goods from 125% to 10%. Effective from May 14, the tariff decrease is active for 90 days. This move reflects an attempt to ease trade tensions, providing a potential financial windfall for multiple markets, with notable jumps in equity and cryptocurrency sectors.
The announcement led to a 3% increase in US stocks, reflecting investor optimism. In cryptocurrencies, Bitcoin soared, surpassing $105,000, reflecting growing confidence among investors. The tariff relief provides a temporary reprieve for global markets, offering potential relief from inflationary pressures. Lower tariffs are expected to foster positive sentiment, encouraging capital inflows into cryptocurrencies. Market Analyst noted, “This surprise announcement has significantly altered market outlook, benefiting both traditional and cryptocurrency markets.”
Market analysts, including QCP Group, suggest the return of risk-on sentiment, historically correlating with enhanced cryptocurrency adoption. A comprehensive resolution to US-China tensions remains uncertain, but the short-term tariff pause offers a temporary market uplift. Investors now turn their attention to upcoming US CPI data, expected to provide further clarity on inflation trends and their potential impact on monetary policy decisions worldwide. The collaboration between the two economic powers signals an opportunity to reduce geopolitical instability temporarily, inviting potential growth in adjacent sectors.
Scott Bessent, U.S. Treasury Secretary, stated, “We are excited to announce the tariff reduction agreement that we believe will lead to positive market responses.”