Bloomberg Daybreak: Europe Edition UPDATE: Major US-China Tariff Cuts Propel Stocks And Dollar Higher
May 12, 2025
Brendan Murray, a trades reporter, dives into the recent temporary tariff cuts between the US and China, stirring optimism in global markets. The agreement has propelled stocks upward, with the S&P 500 futures soaring 3%. Murray discusses the potential long-term impacts of these tariff reductions on international trade dynamics and how they might reshape relations between the two superpowers. He also touches on the contrasting market reactions to US drug pricing reforms and highlights the urgency of peace talks over Ukraine, emphasizing a complex global economic landscape.
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US-China Tariff Cuts Boost Markets
- The US and China significantly reduced tariffs to temporarily cool tensions and avoid decoupling.
- Markets reacted positively with big surges in stocks and US dollar strength.
Tariff Cuts Favor China, US Retreats
- The US reduced Chinese tariffs from 145% to 30%, less than half of what Trump previously said was reasonable.
- This is seen as a major US retreat, giving relief to China but weakening US leverage in trade talks.
90-Day Pause Brings Market Optimism
- The tariff reduction was much larger than expected, driving strong optimism in US equities.
- However, the agreement is only a 90-day pause, so sustainability of optimism remains uncertain.