The United States and China have agreed to drastically roll back tariffs on each other’s goods for an initial 90-day period, in a surprise breakthrough that has de-escalated a punishing trade war and buoyed global markets.
The announcement tonight, which was made in a joint statement, comes after a weekend of marathon trade negotiations in Geneva, Switzerland, by officials from the world’s two largest economies, during which both sides touted “substantial progress”.
Both sides recognised “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship”, they said in the statement.
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The tariff revisions will be imposed by May 14.
US President Donald Trump’s 20 per cent fentanyl-related levies on China, imposed in February and March, will stay.
However, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.
That effectively means the US will temporarily lower its overall tariffs on Chinese goods from 145 per cent to 30 per cent, while China will cut its levies on American imports from 125 per cent to 10 per cent, according to the joint statement.
The two sides also agreed to establish “a mechanism to continue discussions about economic and trade relations”, led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, it said.
“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the parties,” the statement read.
“As required, the two sides may conduct working-level consultations on relevant economic and trade issues.”
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Speaking at a press conference in Geneva, Bessent said: “The consensus from both delegations is neither side wants to be decoupled.”
“What has occurred with these very high tariffs… was an equivalent of an embargo, and neither side wants that,” he said.
“We do want trade. We want more balance in trade. And I think both sides are committed to achieving that.”
Global investors are cheering a thaw in the trade war sparked by Trump’s massive tariffs, which have roiled financial markets, disrupted supply chains and stoked recession fears.
Dow Jones futures jumped more than 2 per cent, while S&P 500 futures rose nearly 3 per cent, and the tech-heavy Nasdaq Composite futures went up more than 3.5 per cent during Asian afternoon trading.
Asian markets were higher too, with Hong Kong’s Hang Seng index gaining more than 3 per cent.
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