US and China agree to slash tariffs temporarily after trade talks
The United States and China agreed Monday to a 90-day truce in their raging trade war — with each agreeing for now to slash reciprocal tariffs by more than 100 percentage points, bringing China’s duty rate down to just 10%.
Under the agreement, the US will drop its 145% tariff rate on most Chinese goods to 30%, while China will lower its rate to 10% from 125%, officials said.
The agreement also includes a mechanism for talks toward a permanent deal to continue — and the two sides spoke about how they will both address the flow of fentanyl from China to the US, a White House readout of the agreement read.
At the White House Monday, President Trump confirmed that 25% tariffs on cars, steel and aluminum remain in effect — and duties on pharmaceuticals could still happen.
“The relationship is very, very good. I’ll speak with President Xi [Jinping] maybe at the end of the week,” Trump told reporters, adding that “to me, the biggest thing that came out of that meeting is they’ve agreed — now we have to get it papered — but they’ve agreed to open up China.”
The president also warned that if China doesn’t agree to a final deal in 90 days, the US tariff rate would raise to “substantially higher” than the current 30%.
“I think they’re going to follow,” Trump predicted. “I think they want [a deal] very badly.”
Stock markets rose sharply following the news that the world’s two largest economies stepped back from a clash that had upended the global economy.
The Dow Jones Industrial Average spiked 1,161 points to close at 42,410.10 — erasing all its losses since Trump’s April 2 “Liberation Day” tariff announcement. The Nasdaq rose almost 780 points while the S&P 500 jumped more than 184 points.
“The consensus from both delegations this weekend is neither side wants a decoupling,” US Treasury Secretary Scott Bessent said after the high-stake talks with Chinese officials in Switzerland.
“And what had occurred with these very high tariffs … was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade.”
“We want more balanced trade. And I think that both sides are committed to achieving that,” he added.
Bessent later told CNBC Monday that the weekend discussions in Switzerland were “respectful” — but admitted that finalizing an agreement over the next three months would probably not be “easy.”
“This has been going on a long time,” the Treasury secretary said.
“President Trump, in his first term, realized a very effective trade deal that was signed in the Oval Office in January 2020, and the Chinese delegation basically messaged to us that the Biden administration failed to hold them accountable for it.”
China’s Commerce Ministry said the two sides had agreed to cancel 91% in tariffs on each other’s goods and suspend another 24% in tariffs for 90 days — bringing the total reduction to 115 percentage points.
“This initiative aligns with the expectations of producers and consumers in both countries and serves the interests of both nations as well as the common interests of the world,” a Chinese ministry statement said.
The Geneva meetings were the first face-to-face interactions between senior US and Chinese economic officials since President Trump announced his big tariff hike on Chinese goods last month.
In response to the 145% tariffs, China quickly retaliated by hitting American imports with a 125% levy.
The full impact on the tariffs and other trade penalties enacted by Washington and Beijing remains unclear.
Bessent said that the US would push forward with strategic rebalancing in areas including medicines, semiconductors and steel where it had identified supply chain vulnerabilities.
“Both countries represented their national interest very well,” he said. “We both have an interest in balanced trade, the US will continue moving towards that.”
The schedule for further talks has yet to be finalized, but the treasury secretary told CNBC the next sitdown would probably take place in the “next few weeks.”
With Post wires
