Free to Read: China, U.S. Cool Trade Row With Temporary Cut in Tariffs
The agreement was announced after the two sides held trade talks in Geneva, Switzerland, after weeks of tit-for-tat tariff hikes that had roiled global markets since early April
China and the U.S. have agreed to suspend most of the punitive goods tariffs they had imposed on each other for 90 days, while they continue negotiations to resolve bilateral economic and trade disputes, according to a joint statement released by the two sides on Monday.
The agreement was announced after the two sides held trade talks in Geneva, Switzerland, after weeks of tit-for-tat tariff hikes that had roiled global markets since early April.
According to the newly inked agreement, the United States will reduce its tariff on all Chinese goods from 145% to 30%, while China will cut its retaliatory tariff on American goods from 125% to 10%. This represents a significant reduction of 115 percentage points in punitive tariffs on both sides.
Specifically, as part of the deal, the U.S. has agreed to remove its so-called "Liberation Day" tariffs, dropping them from 34% to 10%. However, the U.S. will maintain its 20% tariffs on Chinese goods, which were implemented earlier this year over concerns related to fentanyl trafficking.
On the Chinese side, Beijing has committed to removing all but 10% of the tariffs it imposed since April 2. Additionally, China will suspend or remove various non-tariff countermeasures, including sanctions on American firms and restrictions on rare-earth mineral exports.
However, the joint statement did not address product-specific tariffs that were imposed during President Donald Trump’s first term, nor did it provide details on the reintroduced U.S. tariffs on low-value parcels from China.
Both sides have pledged to complete these tariff reductions by May 14, in the spirit of “mutual opening, continued communication, cooperation, and mutual respect.”
In Geneva, the lead negotiators from both countries hailed the trade talks as a breakthrough. Vice Premier He Lifeng, China's lead official on economic and trade affairs, described the discussions as "productive" and emphasized that they marked a significant step toward resolving differences through dialogue.
U.S. Treasury Secretary Scott Bessent echoed He’s sentiment, saying, “Neither side wants decoupling.” Bessent further explained that the high tariffs had effectively acted as an embargo, but both sides are now eager to promote trade.
In addition to the tariff reductions, the two sides agreed to create a mechanism for ongoing discussions about their economic and trade relations. The mechanism will be led by Vice Premier He Lifeng from China and Treasury Secretary Scott Bessent, along with U.S. Trade Representative Jamieson Greer. Discussions will alternate between China, the U.S., and a third country agreed upon by both parties.