US-China Tariff Deal: Gold and silver prices nosedived on Monday after the United States and China reached a landmark agreement to cut most reciprocal tariffs, signaling a significant thaw in trade tensions between the two economic superpowers.
In a joint announcement, both countries confirmed they would reduce existing tariffs on each other’s goods from 125% to 10%. However, the U.S. will continue to impose a 20% duty on Chinese imports related to fentanyl, effectively placing China’s overall tariff exposure at 30%. The deal also includes a 90-day pause on any new trade actions.
The markets reacted swiftly. On Comex, gold plummeted more than 3.5%, losing over $100 to trade at $3,227 per ounce. In the spot market, gold hovered near $3,220, while silver slipped 2% to trade around $32.
In the Indian market, the impact was equally sharp. On MCX, gold tumbled over ₹3,500, dipping below the ₹93,000 mark. Silver fell ₹2,300, reaching ₹94,400.
China’s yuan strengthened in response to the deal, hitting a six-month high. The onshore yuan firmed to 7.2001 per dollar, its strongest level since November 2024. Meanwhile, the Dollar Index rose 1.24%, reaching 101.5.
Speaking at a press conference in Lake Geneva, U.S. Treasury Secretary Scott Bessent expressed optimism about the outcome of the talks.
“We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process,”
Bessent said.“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%.”
The announcement has brought renewed volatility to precious metals markets, with investors now awaiting further clarity on the details of the deal and its broader impact on global trade and monetary policy.
Here is the official Joint Statement as released by the White House:
“The Government of the United States of America (the “United States”) and the Government of the People’s Republic of China (“China”),
Recognizing the importance of their bilateral economic and trade relationship to both countries and the global economy;
Recognizing the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship;
Reflecting on their recent discussions and believing that continued discussions have the potential to address the concerns of each side in their economic and trade relationship; and
Moving forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect;
The Parties commit to take the following actions by May 14, 2025:
The United States will (i) modify the application of the additional ad valorem rate of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of April 2, 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10 percent on those articles pursuant to the terms of said Order; and (ii) removing the modified additional ad valorem rates of duty on those articles imposed by Executive Order 14259 of April 8, 2025 and Executive Order 14266 of April 9, 2025.
China will (i) modify accordingly the application of the additional ad valorem rate of duty on articles of the United States set forth in Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining additional ad valorem rate of 10 percent on those articles, and removing the modified additional ad valorem rates of duty on those articles imposed by Announcement of the Customs Tariff Commission of the State Council No. 5 of 2025 and Announcement of the Customs Tariff Commission of the State Council No. 6 of 2025; and (ii) adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.
After taking the aforementioned actions, the Parties will establish a mechanism to continue discussions about economic and trade relations. The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the U.S. side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative. These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues.”
This development comes at a time of global economic uncertainty and brings temporary relief to international markets. The suspension is expected to have ripple effects on currency, commodity, and equity markets in the weeks ahead.
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