Chinese stocks soared and the yuan strengthened on April 11, 2025, after the U.S. and China reached a deal to slash reciprocal tariffs, easing tensions from the ongoing trade war.
Chinese stocks surged, and the yuan strengthened dramatically after the United States and China announced they had reached a landmark agreement to slash reciprocal tariffs, signaling a de-escalation in the ongoing trade war between the two economic giants.
According to U.S. Treasury Secretary Scott Bessent, the deal, reached after talks with Chinese officials in Geneva, includes a 90-day pause on punitive tariffs, with the U.S. agreeing to reduce tariffs on Chinese goods by 115%. The agreement has injected confidence into the markets, with investors now seeing greater certainty in the bilateral trade relationship.
Following the announcement, Hong Kong’s Hang Seng Index extended its gains to over 3%, while the Hang Seng Tech Index climbed more than 5%. China’s blue-chip CSI 300 Index rose by 1.2%, and the Shanghai Composite Index gained 0.8%. The most significant impact was seen in the yuan, which strengthened to 7.2001 against the U.S. dollar, reaching a six-month high. Its offshore counterpart also saw a rise of more than 0.5%.
Analysts are predicting continued optimism in the Chinese markets. William Xin, chairman of Spring Mountain Pu Jiang Investment Management in Shanghai, stated, “The result far exceeds market expectations. Previously, the hope was just that the two sides could sit down to talk, and the market had been very fragile. Now there’s more certainty. Both China stocks and the yuan will be in an upswing for a while.”
The deal came as U.S. President Donald Trump had earlier signaled that punitive tariffs on China, which had reached as high as 145%, would likely come down as part of the negotiations. This trade deal could signify the beginning of a more stable and predictable economic relationship between the U.S. and China, easing the volatility that has marked global trade over the last few years.
