US and China Reach Agreement to Reduce Tariffs for 90 Days

On Monday, the United States and China announced that they have agreed to reduce reciprocal tariffs. Speaking after talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent said both sides agreed to a 90-day pause on tariff measures.

The United States will scale back the additional tariffs imposed on China this year, lowering the rate from 145% to 30%. Meanwhile, China will reduce its tariffs on American goods from 125% to 10%.

“Both countries represented their national interests well,” said Bessent. “We both are interested in balanced trade, and the United States will continue to move in that direction.”

Bessent spoke alongside US Trade Representative Jamieson Greer following weekend negotiations, during which both sides praised the progress made in narrowing their differences.

“The consensus between both delegations this weekend was that neither side wants decoupling,” Bessent added. “These extremely high tariffs essentially functioned as an embargo, and neither side wants that. We want trade.”

China also stated that it would “suspend or cancel” non-tariff measures previously imposed on the US.

The meetings in Geneva marked the first face-to-face interactions between senior US and Chinese economic officials since US President Donald Trump returned to office and launched a global tariff offensive, with hefty duties on Chinese goods.

Since taking office in January, Trump raised tariffs on Chinese imports to 145%, in addition to those already imposed during his first term and the tariffs left in place by President Joe Biden’s administration.

China responded by restricting exports of certain rare earth elements—vital to US weapons manufacturers and consumer electronics producers—and raising tariffs on US goods to 125%.

The tariff dispute has stalled nearly $600 billion in bilateral trade, disrupted supply chains, sparked fears of stagflation, and triggered some layoffs.

Financial markets had been closely watching for signs of easing trade tensions. On Monday, US stock futures rose and the dollar firmed against traditional safe-haven currencies, as the talks raised hopes that a global recession might be averted.

According to consultancy Capital Economics, due to pre-existing tariffs before Trump’s return, total US tariffs on Chinese goods will drop to around 40% after the deal. In comparison, Chinese tariffs on US goods would fall to around 25%, as reported by the Financial Times.

Source: Valor Econômico

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