The United States and China have reached a deal to significantly reduce tariffs on each other’s goods for a 90-day period, marking a major de-escalation in the ongoing trade conflict that has unsettled global financial markets and stoked fears of a worldwide economic slowdown.
In a joint statement released after their first round of talks since the start of the dispute, the two largest economies confirmed plans to lower their previously steep, triple-digit tariffs to more moderate levels and to continue negotiations in the months ahead.
US Treasury Secretary Scott Bessent, who led discussions with Chinese Vice Premier He Lifeng and international trade envoy Li Chenggang over the weekend, described the talks as “productive” and “robust”, noting mutual respect on both sides.
President Donald Trump had last month slapped a 145 percent tariff on Chinese imports, a dramatic hike compared to the 10 percent rate imposed on most other countries under his sweeping tariff campaign. China retaliated with a 125 percent duty on US goods.
Under the new agreement, both nations will scale back their respective tariffs by 115 percentage points — lowering the US rate to 30 percent and China’s to 10 percent.
Both governments have committed to creating a framework for continued dialogue on economic and trade matters. China’s commerce ministry welcomed the development, calling it “substantial progress” and stating it served “the mutual interests of both countries and the global community”. Beijing also urged Washington to abandon what it termed “unilateral tariff practices”.
Markets responded swiftly to the news. The US dollar, which had weakened following the launch of the tariffs in April, bounced back, while stock futures in the US surged. Markets across Europe and Asia also rallied in response to the truce.
The protracted US-China trade dispute has shaken investor confidence worldwide, with analysts warning that prolonged tariffs could reignite inflation and drag down the global economy.
Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, praised the outcome as a “significant step forward”, noting that the breakthrough could have positive implications for developing economies most vulnerable to global trade disruptions.
The Geneva negotiations, held discreetly at the Swiss ambassador’s residence to the United Nations, took place shortly after Trump hinted on social media that he was considering an 80 percent tariff on Chinese goods. However, the White House later clarified that any reductions would be reciprocal, not unilateral.
The US president had also recently finalised a trade agreement with Britain — the first such deal since launching his global tariff campaign. That agreement provided limited relief from tariffs in selected sectors, but kept a 10 percent tariff in place on most UK imports, which Trump indicated could serve as a benchmark rate for other nations.
