TLDR
- U.S. and China agree to temporarily reduce tariffs during a 90-day negotiation period
- U.S. will cut tariffs on Chinese goods from 145% to 30%, while China will reduce its tariffs from 125% to 10%
- Trade negotiations in Geneva were described as “productive” with “important consensus” reached
- Officials from both countries expressed positive views about the agreement
- Treasury Secretary Scott Bessent stated that “neither side wanted a decoupling” of the economies
The United States and China announced a deal to temporarily slash tariffs following weekend negotiations in Geneva, offering relief to markets and businesses affected by the ongoing trade tensions.
The agreement will suspend the punishing tariffs both countries have imposed on each other for 90 days while they work toward a more permanent solution.
Under the terms of the deal, the United States will reduce its tariff rate on Chinese imports from 145% to 30%, while China will lower its duties on American goods from 125% to 10%. The agreement was announced in a joint statement on Monday, though initial word of a deal came Sunday with few specifics.
Treasury Secretary Scott Bessent, who led the U.S. delegation alongside U.S. Trade Representative Jamieson Greer, described the weekend talks as “productive” and yielding “a great deal” of progress.
At a news conference in Geneva, Bessent emphasized the mutual benefits of the agreement, saying,
“We concluded that we have a shared interest. The consensus from both delegations is that neither side wanted a decoupling.”
The development comes after weeks of economic uncertainty that began on April 2 when President Donald Trump announced the 145% tariffs on Chinese goods. Beijing responded with retaliatory tariffs of 125% on U.S. products, escalating tensions between the world’s two largest economies.
Market Response and Economic Impact
Global markets responded positively to the news of the agreement. The benchmark index in Hong Kong surged 3 percent, matching a similar jump in S&P 500 stock futures, as investors welcomed the potential easing of trade tensions.
The tariff standoff had created widespread disruption for businesses on both sides. Many American companies had suspended orders from China while waiting for tariff rates to come down, raising concerns about potential price increases for consumers.
Chinese manufacturers also felt the impact, experiencing a sharp decline in orders for exports to the United States. This added pressure to China’s already sluggish economy, making a resolution appealing to both parties.
President Trump appeared optimistic about the negotiations even before they concluded. In a Saturday post on Truth Social, he wrote that U.S. officials had a “very good meeting today with China” and that “many things discussed, much agreed to.” He characterized the talks as “a total reset negotiated in a friendly, but constructive, manner.”
Chinese officials shared the positive assessment. Vice Premier He Lifeng said the meeting “achieved substantial progress and reached important consensus,” while China International Trade Representative Li Chenggang suggested that a forthcoming statement would contain “good news for the world.”
The agreement also addresses U.S. concerns about fentanyl trafficking. Bessent and Greer indicated that they had substantive discussions on U.S. demands that Beijing crack down on the chemical ingredients used to make the drug. According to Bessent, the Chinese “understood the magnitude” of the fentanyl crisis in the United States.
A 20 percent tariff that Trump initially added to Chinese exports over the fentanyl issue will remain in place, even as the larger tariff reductions take effect.
Both sides agreed to establish “a consultation mechanism for trade and economic issues,” according to Vice Premier Lifeng, suggesting a framework for continued dialogue.
The full details of the agreement are expected to be released soon, with Bessent scheduled to provide a complete briefing on Monday morning. Greer noted the speed of reaching an agreement, saying it “reflects that perhaps the differences were not so large as maybe thought.”
