THE United States and China have agreed to a 90-day pause in their ongoing trade war and will roll back the majority of their punitive tariffs, signalling a marked de-escalation in tensions between the world’s two largest economies.
AP reported today that in a joint announcement delivered in Geneva on Monday, US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent confirmed that Washington would slash its tariff rate on Chinese goods from a punishing 145% to 30%.
Beijing, in turn, will lower its tariffs on American imports to 10%, matching the scale of the US reduction.
“The consensus from both delegations this weekend is neither side wants a decoupling,” said Bessent. “What had occurred with these very high tariff rates was the equivalent of an embargo. And neither side wants that. We do want trade. We want more balanced trade. And I think both sides are committed to achieving that.”
The move to ease tariffs, which had escalated into a full-scale trade conflict last month, has been welcomed by global markets. The US futures market surged over 2%, Hong Kong’s Hang Seng index jumped nearly 3%, and equity benchmarks in Germany and France both posted solid gains.
The temporary reprieve follows a dramatic tariff escalation initiated by former President Donald Trump, who imposed combined levies of up to 145% on Chinese goods in an attempt to pressure Beijing on multiple fronts, including the trafficking of the synthetic opioid fentanyl.
China retaliated with tariffs of 125% on US products, effectively halting bilateral trade flows valued at over US$660 billion in the previous year.
Greer and Bessent noted that bilateral consultations would continue over the coming months to address the broader structural issues underpinning the trade dispute. - May 12, 2025
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