U.S., China agree to pause most tariffs after trade talk

The United States and China announced Monday they were massively rolling back tariffs on each other’s goods for 90 days, after trade talks in Geneva over the weekend.

The United States and China said they have agreed a deal to slash reciprocal tariffs as Washington and Beijing seek to end a trade war that has disrupted the global economy and set financial markets on edge.

Reuters

The breakthrough follows months of ratcheting up economic tensions between the world’s two largest economies, since U.S. President Donald Trump returned to office and launched an all-out trade war against almost all of Washington’s partners and rivals.

In a rare joint statement, the two governments said U.S. tariffs on Chinese goods would be reduced from 145 per cent to 30, while China would cut its levies on U.S. imports from 125 per cent to 10. The reductions will take place by May 14 and last “for an initial period of 90 days.”

“After taking the aforementioned actions, the parties will establish a mechanism to continue discussions about economic and trade relations,” the joint statement said, adding this dialogue would be led by Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer.

Speaking in Geneva, Mr. Bessent said “we both have an interest in balanced trade, the U.S. will continue moving toward that.”

“We have a very good mechanism to avoid unfortunate escalations happening again,” Mr. Bessent said, adding the “consensus from both delegations is that neither side wanted a decoupling.”

Both economies have begun to feel the strain of reduced exports and severely higher prices as a result of reciprocal tariffs, and concerns over disruption to the bilateral relationship have contributed to chaos in the U.S. stock and treasury markets.

Facing growing criticism, Mr. Trump last month said he was open to a trade deal, which he said could happen “pretty quickly,” promising not to “play hardball” during negotiations with China.

“They’re gonna do very well, and I think they’re going to be happy, and we’re gonna live together very happily and ideally work together,” he said.

On April 2, Mr. Trump announced a raft of “Liberation Day” tariffs against almost every country in the world, with levies apparently decided based on a calculation derived from a target’s trade deficit with the U.S., though countries with a trade surplus and even uninhabited territories were not spared.

After markets plummeted and a global recession loomed, Mr. Trump backtracked, announcing a 90-day pause, which is still in effect. He has since been negotiating individual trade deals with many countries, with the most comprehensive struck last week with Britain.

Speaking to reporters Friday, Mr. Trump dismissed criticism of his approach.

“I think the tariffs are going to be the greatest thing we’ve ever done as a country,” he said. “It’s going to make our country rich again.”

With files from Alexandra Li in Beijing and Reuters