The United States and China have reached a temporary trade agreement, announcing a 90-day reduction in tariffs on each other’s imports.
The move comes after two days of intense negotiations in Geneva, Switzerland, marking the first major breakthrough since tensions escalated under President Donald Trump’s aggressive trade policies.
Under the revised tariff structure, U.S. tariffs on Chinese imports will drop from 145% to 30% by May 14, including those tied to fentanyl-related trade measures.
Chinese tariffs on U.S. goods will also be reduced from 125% to 10%, signaling an effort to restore economic stability between the world’s two largest economies.
The agreement aims to de-escalate trade hostilities and provide both nations with additional time to negotiate long-term trade solutions while reducing immediate financial strain on businesses and consumers.
The breakthrough follows previous rounds of trade talks, where officials expressed cautious optimism about resolving disputes. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, who led the U.S. delegation, described the discussions as “productive” and “constructive.”
“We are in agreement that neither side wants to decouple,” Bessent stated. He added that discussions on fentanyl regulations and trade agreements with China were robust and might lead to purchasing commitments from Beijing.
Markets reacted positively, with Asian and European stock indices climbing and U.S. futures hitting session highs. Additionally, oil prices and Treasury yields rose, while the offshore yuan appreciated by 0.5% against the dollar following the announcement.
The U.S.-China trade war has been an ongoing issue, exacerbated by Trump’s “Liberation Day” tariff policies, which introduced 145% duties on Chinese imports, followed by China’s 125% retaliatory levies on American goods.
These tariffs have significantly disrupted trade flows, with annual two-way trade previously exceeding $660 billion. Industries across both nations warned of rising costs, supply chain disruptions, and economic instability, prompting calls for a negotiated settlement.
The U.S. and China will continue discussions through a newly established “trade consultation mechanism,” offering hope for more structured economic diplomacy moving forward.
