The U.S. and China have reached a deal to temporarily cut tariffs on imported goods.
Reciprocal tariffs will be cut by 115% for a period of 90 days, U.S. Treasury Secretary Scott Bessent said.
U.S. President Donald Trump had imposed a 145% tariff on China, sparking a trade war.
The new deal was announced in a press conference in Geneva
Highlights
- The U.S. and China agreed to cut reciprocal tariffs for 90 days, lowering U.S. tariffs on Chinese goods to 30% and China's on U.S. goods to 10%.
- President Trump praised the Geneva talks as a 'total reset' and progress toward opening China to American business.
- China will suspend or remove non-tariff countermeasures against the U.S. by May 14 as part of the deal.
Image credits: Fox News
China responded with a 125% tariff on some U.S. imports, as well as canceling orders of several Boeing aircraft.
But the new deal will significantly lower the tariffs, with the U.S. cutting tariffs on Chinese imports to 30% for 90 days.
China will lower the levy on U.S. goods to 10% for the same period of time.
“We had very robust discussions, both sides showed great respect,” Bessent said during a press conference on Monday.
“We concluded that we have shared interest and we both have an interest in balanced trade, the US will continue to move towards that.”
At the start of April, a baseline tariff of 10% was placed on almost all goods being imported into the U.S.
Credits: Sky News
While China always had a higher rate, U.S. trade representative Jamieson Greer said it was the only country that chose to retaliate with reciprocal tariffs and “disproportionate and asymmetrical non-tariff measures.”
In response, Trump again increased the tariff on Chinese goods, and the tit-for-tat resulted in an “effective embargo” for U.S.-China trade.
An additional measure to tackle fentanyl will still be enforced by the U.S. to pressure China into doing more to curb the illegal trade.
“The rapid nature that we were able to conduct and conclude these discussions is a testament to mutual understanding and mutual respect between the Chinese and U.S. sides,” Greer said.
Image credits: Gene Gallin/Unsplash
“Both the Chinese and U.S. agreed to work together constructively on fentanyl and there is a positive path forward there as well,” he added.
China’s commerce ministry confirmed both sides would take action by May 14, and it would take all necessary measures to suspend or remove non-tariff countermeasures taken against the U.S. since April 2, Reuters reports.
The deal comes after talks between top American and Chinese officials in Geneva, Switzerland, over the weekend.
Trump praised the talks and said great progress had been made for the good of both the U.S. and China.
The U.S. and China will continue negotiations for a deal beyond the initial 90 days
“A very good meeting today with China, in Switzerland. Many things discussed, much agreed to,” Trump posted on Truth Social on Sunday.
“A total reset negotiated in a friendly, but constructive, manner. We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!”
Today’s announcement has led to a rally in global stock markets, with investors reacting positively to the news.
It comes after the U.S. and U.K. announced a new trade agreement on May 8, aimed at boosting economic ties post-Brexit.
Image credits: Ricardo/Unsplash
The deal reduces tariffs on up to 100,000 British cars annually and cuts duties on U.K.-made airplane parts like Rolls-Royce engines.
The 25% tariff on steel and aluminium exports to the U.S., which was implemented in March, has also been lifted.
The tariff placed on ethanol coming into the U.K. from the U.S. has been removed.