In a major shift that could ease years of economic tension, the United States and China announced Monday that they have agreed to drastically reduce tariffs on each other’s goods for an initial 90-day period. The move marks a rare diplomatic breakthrough in a trade war that has rattled global markets and strained relations between the world’s two largest economies.
The announcement followed a weekend of intensive trade talks held in Geneva, Switzerland. In a joint statement released after the negotiations, both nations cited “substantial progress” and emphasized their commitment to fostering a long-term, stable economic relationship.
Starting May 14, the U.S. will reduce its tariffs on Chinese imports from 145% to 30%, while China will cut its own tariffs on American goods from 125% to 10%, according to details in the statement.
The agreement also establishes a formal structure for ongoing dialogue. Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer will lead the continuing discussions. Talks may take place alternately in China, the United States, or in a third country if both sides agree. Working-level consultations may also be held to address specific economic and trade matters, the statement said.
Both governments acknowledged the importance of building a “sustainable, long-term, and mutually beneficial economic and trade relationship.”
The breakthrough comes as a surprise after years of tit-for-tat tariff escalations, initially triggered by the Trump administration’s sweeping duties on Chinese goods. Those tariffs had far-reaching impacts, disrupting global supply chains and weighing heavily on investor sentiment.
Financial markets responded swiftly to the news. In Asian afternoon trading, Dow futures surged more than 2%, S&P 500 futures rose nearly 3%, and Nasdaq Composite futures jumped more than 3.5%. The rally extended to Asian markets as well, with Hong Kong’s Hang Seng Index climbing over 3%.
The de-escalation is being welcomed by businesses and investors worldwide, many of whom have been calling for an end to the ongoing trade uncertainty. It remains to be seen whether the 90-day tariff reduction will lead to a more comprehensive and permanent resolution, but the agreement signals a willingness on both sides to work toward economic stabilization.
This is a developing story and will be updated as more information becomes available.
Source: CNN
