Recent negotiations between the United States and China in Geneva resulted in a significant de-escalation of the ongoing trade tensions, which has alleviated some pressure on struggling global markets.

On Monday, both parties announced a 90-day agreement to suspend reciprocal tariffs.

As part of this accord, Chinese tariffs on U.S. goods will decrease to 10%, while U.S. tariffs on Chinese goods will be reduced to 30%.

The durability of this trade agreement remains uncertain, with questions surrounding whether it signifies the beginning of a more stable relationship between the two economic superpowers or merely a temporary truce in a tumultuous environment.

Observers were surprised by the speed at which the agreement was reached, especially given the prevailing political tensions between the leaders of both nations and their commitments to preserving national image.

However, an unexpectedly friendly atmosphere and mutual goodwill reportedly contributed to the success of the discussions.

U.S. Trade Representative Jameson Greer noted that many key negotiations took place in a relaxed outdoor setting, which helped foster personal relationships among representatives.

“This environment allowed us to develop personal connections with our counterparts, leading to the successful outcome we achieved,” Greer stated.

In addition to the spring weather in Switzerland, a relatively new personal approach from the Chinese side may have played a significant role in the negotiations.

Economic expert Lizzy Li remarked that Chinese officials have been making concerted efforts to communicate more as 'human beings'.

This more approachable demeanor was evident in both formal communications and in the behavior of key figures like Vice Premier He Lifeng, who adopted a tone she described as “more responsive and less rigid.”

This shift was positively received by U.S. representatives, particularly as hardliners, such as White House advisor Peter Navarro, have appeared to be sidelined.

Nevertheless, in the current administration characterized by unpredictability, the future leadership dynamics remain unclear.

The critical question among analysts centers on which side made the first concession.

Some, including former U.S. Treasury Secretary Larry Summers, indicated that President Trump initiated the move towards negotiations after realizing the unpopularity of the trade war he started.

Chinese officials facing mounting pressures from suppliers and exporters expressed hopes for a full separation, nevertheless framing the negotiations as a victory, with President Xi Jinping stating that “bullying and hegemony will only lead to self-isolation.” Conversely, pressures on U.S. policymakers continue, as they balance domestic concerns amid fluctuating opinion poll numbers.

Questions persist regarding future actions: Will U.S. Treasury Secretary Steven Mnuchin seek major tariff exemptions aimed at fully resolving the trade war?

Will President Trump introduce new tariffs during the 90-day period, or do markets view this pause as potentially indefinite?

For many Americans, a critical query centers around whether Chinese manufacturers will once again target U.S. markets.

Chinese exporters remain keen on accessing the U.S. market, acknowledging that a 30% price increase might be tolerable for consumers, while also eyeing local and international markets as potential alternatives.

Despite the agreed-upon tariff reductions between the U.S. and China, the U.S. maintains its mail exemption policy, known as 'de minimis', for packages valued under $800, which remains off the table.

The U.S. reduced the rate on these shipments from 120% to 54%, a notable improvement, yet it still exceeds standard import rates.

The de minimis policy has enabled Chinese e-commerce platforms like Shein and Temu to gain significant traction in the U.S. market, and both companies are now attempting to mitigate costs by increasing imports of popular products to their U.S. warehouses.

However, low-income consumers continue to feel the adverse effects of this policy and are seeking temporary solutions through other Chinese applications.