US to lower tariffs on China from 145% to a base 10%, 20% fentanyl levy for 90 days

The highly anticipated joint US-China statement on the first round of high-level US-China trade talks held over the weekend in Geneva, Switzerland, is out, stating that “the US will modify application of rate of duty on articles of China by suspending 24 percentage points of that rate for initial period of 90 days.” Additional takeaways US will retain remaining rate of 10 % on those articles. China will modify application of additional ad valorem rate of duties by suspending 24 percentage points of that rate for 90 days. Only a 10% base tariffs rate will be applied. A mechanism to continue discussions about economic and trade relations is established. These discussions may be conducted alternately in China and the US, or in an agreed third country. Both sides may conduct working-level consultations on relevant economic and trade issues. Market reaction At the time of writing, the US Dollar Index (DXY) is up 0.62% on the day, trading near 101.00, with risk sentiment receiving a fresh boost. Risk sentiment FAQs In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest. Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit. The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity. The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection. Source: https://www.fxstreet.com/news/breaking-news-us-to-lower-tariffs-on-china-from-145-to-a-base-10-20-fentanyl-levy-for-90-days-202505120707