GENEVA – The United States and China have reached a temporary agreement to significantly reduce the high import tariffs both countries imposed on each other, easing trade tensions that had rattled global markets.
US Treasury Secretary Scott Bessent confirmed on Sunday that both nations will reduce their respective tariffs by 115% for a 90-day period, following two days of intensive trade talks held in Switzerland. The agreement marks the first major de-escalation in the trade standoff since President Donald Trump imposed steep levies earlier this year.
Key Details of the Deal:
- US tariffs on Chinese imports will drop from 145% to 30% for 90 days.
- Chinese tariffs on US goods will fall from 125% to 10% during the same period.
- The US deal includes continued pressure on Beijing to curb fentanyl trafficking, though officials noted a cooperative tone from China during discussions.
“This agreement shows both countries represented their national interest very well,” Bessent said. “We both have an interest in balanced trade, and the US will continue moving towards that.”
Market Reaction
The announcement triggered an immediate boost in financial markets:
- Hong Kong’s Hang Seng Index rose 3%.
- Shanghai Composite Index, which closed before the news broke, ended 0.8% higher.
- Early trading forecasts in the US pointed to gains of 2–3% across major indices.
- European stocks also opened higher on Monday, reflecting renewed optimism.
Context and Implications
President Trump’s initial 145% tariff on Chinese imports in January, followed by China’s 125% retaliatory tax on select US goods, had heightened fears of a global economic slowdown. Economists and business leaders welcomed this new deal as a positive, if temporary, move toward stabilization.
While not a comprehensive trade agreement, the deal signals a shift in tone and opens the door for more sustained negotiations in the coming months. Both countries are expected to revisit the terms after the 90-day window.
As global markets react positively to the news of the tariff truce, many hope this 90-day window will lead to longer-term economic stability and improved diplomatic ties between the world’s two largest economies.
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