End of tariff war?

Over the last two days, there have been two major positive developments: one, the ceasefire between India and Pakistan after four days of intense clashes that brought the region to the brink of an all-out war. Second, after months of rising tensions, tit-for-tat tariffs, and global market jitters, trade negotiators from the United States and China wrapped up two days of talks in Geneva on a hopeful note.

China and the US have agreed a 90-day pause to the deepening trade war that has threatened to upend the global economy, with reciprocal tariffs to be lowered by 115 percentage points. Speaking to the media after talks in Geneva, the US treasury secretary, Scott Bessent, said both sides had shown “great respect” in the negotiations. A spokesperson for China’s ministry of commerce said that the “move meets the expectations of producers and consumers in both countries, as well as the interests of both nations and the common interest of the world.”

The world can now realistically hope that the tariff war between two major powers can after all come to an end. This bodes well for the global economy and that of India too. This was reflected in the rise of global markets today. In India, stock exchange marked a handsome rise after a long time.Hopefully, from hereon, the situation will only further improve.

However, there are still many headwinds which need to be addressed for the wholesome growth of the global economy. For example, the lingering conflicts in Ukraine and Gaza, which have roiled the economies of Europe and Middle East over the past some years. Since assuming his second term, US president Donald Trump has made every effort to end the war in Ukraine. But despite some positive indications, the war has gone on regardless. Similarly, there’s no immediate end in sight to the conflict in Gaza, which has plunged the Middle East into turmoil. These conflicts need to end for the world economy to get back on the growth path.