The United States and China have reached a pivotal agreement to sharply cut retaliatory tariffs for 90 days, marking a significant step toward easing a trade war that has rattled global markets and fuelled fears of an economic slowdown.
Announced on Monday following high-level talks in Geneva—the first since President Trump launched the trade offensive—the world’s two largest economies issued a joint statement pledging to reduce their triple-digit tariffs to more moderate levels and resume negotiations.
US Treasury Secretary Scott Bessent described the weekend meetings with Chinese Vice Premier He Lifeng and trade envoy Li Chenggang as “productive” and “robust,” adding that “both sides showed a great respect.”
Trump had earlier imposed steep tariffs of 145% on Chinese goods, in contrast to the 10% levied on other nations in his recent global tariff push. China responded with 125% duties on American products.
Under the new agreement, the US will lower tariffs on Chinese imports to 30%, while China will reduce its own to 10%. The Chinese commerce ministry celebrated the “substantial progress” and called the move a win for both nations and the global economy, urging the US to continue reversing unilateral tariff hikes.
Markets responded positively, with stock indices and the dollar rebounding after weeks of volatility driven by the trade tensions.
Though US tariffs remain higher due to a 20% surcharge tied to concerns over Chinese chemical exports used in fentanyl production, officials from both sides agreed to work “constructively” on that issue, with a positive path forward expected.
A new mechanism for continued dialogue on trade and economic relations has also been established. Bessent noted this framework could help prevent future escalations like those seen since April.
Regular and ad hoc negotiations will now be held in the US, China, or third-party countries, according to the Chinese commerce ministry.
While analysts praised the agreement, some cautioned that uncertainties linger. “This is the biggest easing of tensions since the trade war began,” said Wang Wen of Renmin University, “but if no further progress is made in 90 days, the dispute could reignite.”
The Geneva breakthrough follows Trump’s recent trade deal with the UK and drew praise from WTO Director-General Ngozi Okonjo-Iweala, who said it was a “significant step forward” for the world economy, especially vulnerable nations.
