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USD rises as US and China agree to lower tariffs
The US dollar is flying high again. The US dollar index (DXY) surged to 101.691, reaching its highest level since April 10, following the announcement that the US and China have agreed to reduce mutual tariffs. It is a significant development for global markets.
The DXY climbed 1.26% to 101.691 after news broke of a 90-day bilateral tariff reduction agreement between the world’s two largest economies. The index measures the dollar’s strength against a basket of major currencies, including the euro, yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.
According to a statement from the White House, the agreement officially took effect on May 14, 2025. Under the deal, the US will reduce tariffs on Chinese imports from 145% to 30%, while China will lower its duties on American goods from 125% to 10%.
US Treasury Secretary Scott Bessent explained that the substantial easing of tariffs was driven by both sides’ desire to rebalance bilateral trade.
Previously, the US and China had repeatedly escalated tariffs on each other’s goods. President Donald Trump had justified the measures by accusing China of disrespecting the global market. In response, China’s Ministry of Commerce insisted it would not accept unilateral concessions and was prepared to fight to the end in the trade dispute.
Recently, however, tensions have eased. President Trump signaled that a deal with China was possible, and Beijing began exempting select high-value US goods from its retaliatory measures. It is a shift seen as a sign of goodwill.
Published 16 May 2025
© InstaFintech Group
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© InstaFintech Group
