The United States and China have agreed to significantly reduce their tit-for-tat tariffs for a 90-day period, offering a major de-escalation in the trade war that has unsettled financial markets and raised concerns over a potential global economic downturn.
Following their first high-level talks since US President Donald Trump launched sweeping tariff measures, the world’s two largest economies announced a joint agreement on Monday to lower their punitive triple-digit tariffs to double figures and continue negotiations aimed at resolving outstanding trade disputes.
US Treasury Secretary Scott Bessent described the weekend discussions in Geneva with Chinese Vice Premier He Lifeng and international trade representative Li Chenggang as “productive” and “robust,” noting that both sides “showed a great respect.”
Under the new terms, the United States will reduce its tariffs on Chinese goods from 145 percent to 30 percent, while China will lower its duties on US imports from 125 percent to 10 percent. The talks, held at the private residence of Switzerland’s ambassador to the United Nations, yielded what Beijing hailed as “substantial progress.”
“This move… is in the interest of the two countries and the common interest of the world,” China’s commerce ministry said, expressing hope that Washington would continue to work towards reversing what it called the “wrong practice of unilateral tariff rises.”
The announcement triggered a rebound in global stock markets and strengthened the US dollar, both of which had declined sharply following the tariff blitz Trump initiated in April.
Despite the reductions, US Trade Representative Jamieson Greer clarified that a 20 percent levy on certain Chinese chemical exports — tied to US concerns over fentanyl production — will remain in place. However, both countries agreed to cooperate more closely on curbing the flow of chemicals used in fentanyl production, with Greer highlighting a “positive path forward” on the issue.
As part of the agreement, the two sides will establish a mechanism to facilitate ongoing economic and trade discussions. According to the Chinese commerce ministry, these consultations will take place regularly or on an ad hoc basis in China, the US, or mutually agreed third countries.
“I think we leave with a very good mechanism to avoid the unfortunate escalations,” Bessent said. “The nature of what has happened since April 2 could have been avoided if we had had this kind of mechanism in place.”
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, described the outcome as a “success” for Beijing, noting that China managed to secure tariff reductions without making major concessions. Wang Wen, Dean of the Chongyang Institute for Financial Studies at Renmin University, praised the agreement as “the biggest easing of tensions since the global tariff war began” but cautioned that uncertainties remain.
“Without progress over the next 90 days, it is possible that the tariff war will resume,” Wang warned.
The Geneva breakthrough comes shortly after President Trump announced a new trade agreement with Britain — the first such deal since the US initiated its global tariff campaign.
World Trade Organization Director-General Ngozi Okonjo-Iweala welcomed the US-China talks as a “significant step forward” that “bodes well for the future.”
“Amid current global tensions, this progress is important not only for the US and China but also for the rest of the world, including the most vulnerable economies,” she said.