After months of escalating tariff hikes, the U.S. and China have reached a temporary truce, agreeing to suspend most tariffs for 90 days while both sides engage in further trade negotiations. Under the agreement, China will reduce its tariffs on U.S. goods from 125% to 10%, while the U.S. will lower its tariffs on Chinese imports from 145% to 30%. This temporary easing of trade tensions has calmed fears of a looming recession (Business Insider).

In response to the announcement, markets reacted positively. The S&P 500 jumped 3.3% and the Dow rose by 1.6% (WPTZ Plattsburg – Burlington). Meanwhile, businesses on both sides of the Pacific are scrambling to move shipments while the reduced tariffs are in effect. Trade between the U.S. and China is expected to surge during this window of opportunity.

“We may see a substantial jump in cargo for companies that are worried that we will be back at this intersection in a few months, and they need to take advantage of this respite to accelerate trade,” said Scott Kennedy, senior advisor on Chinese business and economics at the Center for Strategic and International Studies told Business Insider.

While it remains uncertain whether the two countries will reach a lasting agreement, this temporary pause has offered much-needed relief to businesses grappling with the financial strain of heightened tariffs and the threat of economic slowdown.