The United States and China have agreed to temporarily slash reciprocal tariffs on their bilateral trade in a deal that surpassed expectations as the world’s two biggest economies seek to end a damaging trade war that has stoked fears of recession and roiled financial markets.
A news report from Reuters on Monday indicated that based on the temporary deal, the U.S. will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% while Chinese duties on U.S. imports will fall to 10% from 125%.
According to the online medium, the new measures are effective for 90 days.
As a result of the deal, the USD rose and stock markets lifted, thereby helping to allay concerns about a downturn triggered last month by U.S. President Donald Trump’s escalation of tariff measures aimed at narrowing the U.S. trade deficit.
- Advertisement -
Speaking after talks with Chinese officials in Geneva, U.S. Treasury Secretary, Scott Bessent, said: “Both countries represented their national interest very well. We both have an interest in balanced trade, the U.S. will continue moving towards that.”
In a conciliatory tone towards China, Bessent spoke alongside U.S. Trade Representative, Jamieson Greer, after the weekend talks in Switzerland in which both sides hailed progress on narrowing differences.
He clarified: “The consensus from both delegations this weekend is neither side wants a decoupling. And what had occurred with these very high tariffs … was the equivalent of an embargo, and neither side wants that. We do want trade.”
Over the past weeks after President Donald Trump announced new tariff policy on the U.S merchandize trade with many of the country’s trading partners, the tariff dispute had brought nearly $600 billion in two-way trade to a standstill, disrupting supply chains, sparking fears of stagflation and triggering some layoffs.
The Geneva meetings were the first face-to-face interactions between senior U.S. and Chinese economic officials since Trump returned to power and launched a global tariff war, imposing particularly hefty duties on China.
Bessent said the deal did not include sector-specific tariffs and that the U.S. would continue strategic rebalancing in areas including medicines, semiconductors and steel where it had identified supply chain vulnerabilities.
