U.S., China agree to lower most tariffs for 90 days amid trade talks
Both sides are hailing the temporary reprieve, which will cut U.S. duties on Chinese goods to 30 percent, but analysts say underlying issues remain.
China and the United States have agreed to lower tariffs on goods from each other’s countries for 90 days, offering a temporary reprieve in a trade war that threatens to cause a global recession and deepen a widening rift between the world’s two largest economies.
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer said Monday, after weekend talks in Geneva with a Chinese delegation led by Vice Premier He Lifeng, that U.S. tariffs on Chinese goods would be reduced to 30 percent from 145 percent.
Beijing said it would cut its blanket tariffs on American products to 10 percent from 125 percent. Both reductions will take effect Wednesday.
Stock markets across Asia rose Monday as investors waited for details about the talks, including hopes of a partial rollback of the tariffs. But analysts cautioned that the announcement fell far short of a trade deal and was merely the beginning of more rounds of negotiations.
A joint statement released by the White House and China’s Ministry of Commerce said that the two countries had agreed on the 90-day pause in the “spirit of mutual opening, continued communication, cooperation, and mutual respect.” They agreed to a mechanism for continuing talks.
“The consensus from both delegations this weekend is that neither side wants a decoupling, and what had occurred with these very high tariffs was the equivalent of a trade embargo, and neither side wants that,” Bessent said in a news conference in Geneva.
“We do want trade. We want more balanced trade and I think both sides are committed to achieving that,” Bessent said, adding that the Trump administration would push for China to open up more to U.S. goods. China’s trade surplus with the United States topped $100 billion last year.
Greer said the two sides had agreed on a pause to continue negotiations, which “both the Chinese and the United States remain very committed to,” but did not offer any clues as to how the underlying issues might be addressed.
China’s Ministry of Commerce reiterated Monday that the meeting was an “important first step” to resolve differences. In a statement, Beijing urged the U.S. to “completely rectify the mistake of unilateral tariffs [and] work together to inject more certainty and stability into the global economy.”
Under the agreement, Beijing will also suspend or cancel some non-tariff retaliatory measures, like export restrictions and the blacklisting of dozens of U.S. companies.
Other tariffs imposed during President Donald Trump’s trade war with China during his first term — as well as a 20 percent duty issued in February over what the president said was China’s failure to stop fentanyl-related chemicals from reaching the United States — will remain in place. Chinese tariffs on U.S. agricultural products, retaliation for the tariffs Trump issued over fentanyl, will also remain.
The weekend talks took place after months of economic and rhetorical hostilities that have roiled global markets and threatened to halt trade between the world’s largest exporter and its largest consumer.
The agreement, although temporary, marks the first tangible move to de-escalate tensions that have been rising since Trump took office in January and almost immediately began imposing tariffs on China.
Since then, Trump and Chinese leader Xi Jinping have been engaged in a high-stakes game of chicken that has seen both sides levying higher and higher duties on the other.
The U.S. had slapped a minimum tariff of 145 percent on Chinese goods while Beijing raised tariffs on American products to 125 percent and restricted exports of key raw materials, including those needed to make military drones, consumer electronics and medicines.
Underlying issues remain
Analysts said Monday’s joint statement lowers the temperature in their trade war but does little to change the overall direction of deteriorating ties between Beijing and Washington, which are closer than ever to a full economic break.
“It’s a more civilized way to divorce. The bifurcation will continue,” said Alicia Garcia-Herrero, chief economist for Asia Pacific at the investment bank Natixis.
“The deal is not a solution. It’s a smoothing of the impact of the bifurcation, just to happen more slowly and less costly. This meeting is a basically an attempt, hopefully successful, of avoiding a global recession,” she said.
Instead, Monday’s announcement sets a new tone and paves the way for more talks and a potential meeting between Trump and Xi.
At that point, a trade deal — and end to the tariff war — could be possible, analysts said.
“This is a major turning point after the United States launched a tariff war against China since Trump came to power again,” said Song Guoyou, deputy director of the Center for American Studies at Fudan University in Shanghai.
The two leaders have not met or spoken since a phone call before Trump became president in January. Trump previously said Xi would need to make the first move, and the two sides issued conflicting versions of who initiated the talks in Geneva.
“Now, after the negotiations, there is indeed a glimmer of new hope,” Song said of a meeting between the two leaders.
Both sides claim a win
Monday’s joint statement allowed both sides to claim a win, said Alfred Wu, an expert on Chinese politics atthe National University of Singapore.
China can say it is a “benign global player trying to promote trade” while Trump can claim he was tough and forced Beijing to engage, Wu said. “It is an agreement in the making, but we cannot anticipate it will be smooth,” he said.
Bessent told reporters Monday that the two sides had “robust” discussions and “very good personal interaction,” and said the setting of Lake Geneva also helped.
He, the Chinese vice premier, on Sunday called the meetings an “important first step” that laid a foundation for reducing tensions between the countries.
Trump on Sunday hailed the progress of the talks and posted on his social media site: “Many things discussed, much agreed to. A total reset negotiated in a friendly, but constructive, manner.”
The statements represent a sharp shift in tone from the bluster of recent months.
Chinese officials, who have repeatedly pledged to “fight to the end” while casting Beijing as the world’s true defender of global trade, had recently softened their rhetoric after Trump said he hoped to make a deal with Xi.
The shift is likely, analysts said, because the trade war is taking a toll on both economies.
Even before the trade war began, the Chinese economy was already suffering from stubborn unemployment, sluggish consumer spending and a looming deflation crisis.
Data released Saturday showed China’s consumer price index ticked down 0.1 percent in April, the third month in a row of decline, as consumers hold back from spending and businesses drop prices to compete for customers.
Still, China’s exports have held up, in part because it is still selling goods to the U.S. by routing them through third countries, a practice called transshipping.
Within China, state media has sought to show Beijing as emerging victorious from the talks.
“What the U.S. really needs to do at this moment is to cherish China’s goodwill,” said a commentary in state-run Xinhua News Agency published after talks concluded Sunday. “This kind of goodwill and patience has its limits and it will never be used on those who repress and blackmail us without pause or have no qualms about going back on their word.”
Hu Xijin, the former editor of the nationalist Global Times tabloid, on Monday wrote that China “had not given one inch in terms of its principles.” “I think this turning point is precisely the result of China’s courage to fight,” he wrote on the microblog Weibo.
Beijing also continued to claim that it was the U.S., not China, that needed a deal.
As talks began Saturday, an influential state-affiliated blog, Yuyuan Tantian, published a cartoon of Bessent rushing to Switzerland pushing an empty shopping cart. It followed up Sunday with an animation showing China repeatedly declining phone calls from an “unknown number” with the caption asking why the U.S. couldn’t “play it cool.”
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