US, China Agree to 90-Day Tariff Truce, Slash Duties Amid Trade War De-escalation
In a significant move to ease economic tensions, the United States and China have agreed to roll back tariffs on each other’s goods for a 90-day period. The breakthrough came after intense trade negotiations in Geneva over the weekend, where senior officials from both countries met for the first time since the escalation of their trade war earlier this year.
As part of the deal, the US will reduce tariffs on Chinese imports from 145% to 30%, while China will slash its duties on American goods from 125% to 10%, according to a joint statement released Monday.
The two nations will also form a joint dialogue mechanism to sustain discussions on broader economic and trade relations. The group will be led by Chinese Vice Premier He Lifeng, US Treasury Secretary Scott Bessent, and US Trade Representative Jamieson Greer.
“We concluded that we have a shared interest,” Bessent told reporters in Geneva. “The consensus from both delegations is that neither side wanted a decoupling.”
The news triggered immediate reactions in global markets. Hong Kong’s Hang Seng Index rose 3%, while futures for the Dow Jones Industrial Average gained over 2%. S&P 500 futures increased by nearly 3%, and Nasdaq futures jumped more than 3.5%.
Analysts have viewed the agreement as a positive step in restoring investor confidence shaken by the prolonged tariff standoff.
The US delegation also raised concerns over China’s role in the fentanyl crisis. “The Chinese understood the magnitude of the fentanyl crisis in the United States,” Bessent said.
Despite the progress, a 20% punitive tariff on Chinese exports, imposed earlier by former President Donald Trump in response to alleged Chinese inaction on fentanyl trafficking, will remain in place.
The US-China trade war began in early 2024 when the Trump administration imposed sweeping tariffs on a wide range of Chinese imports, citing unfair trade practices and national security concerns. China retaliated with its own tariffs, triggering a tit-for-tat escalation that threatened to drag down the global economy.
The impasse had resulted in significant disruptions to global supply chains and rattled financial markets across Asia, Europe, and North America.
Both sides indicated that further rounds of negotiations are expected over the next three months to evaluate progress and potentially agree on a longer-term deal. While the 90-day truce offers immediate relief.
