In a significant de-escalation of ongoing trade tensions, the United States and China have agreed to reduce tariffs for 90 days following a high-level summit held in Switzerland. The agreement was reached between US President Donald Trump and Chinese President Xi Jinping after prolonged discussions.
According to the BBC, under this deal, China will lower tariffs on US goods from 125% to 10%, while the US will reduce tariffs on Chinese imports from 145% to 30%. This represents an average tariff reduction of approximately 115%.
US Revenue Secretary Scott Bessent confirmed the deal and announced that the reduced tariffs will come into effect starting May 14. “Additional tariffs had nearly become a form of commercial blockade. Neither side wants that,” Bessent said during a press briefing.
The trade war, which intensified during the Trump administration, had led to a near-halt in bilateral trade. The number of Chinese cargo ships arriving at US ports dropped significantly, while China’s industrial production suffered, leading to widespread job cuts.
As part of the agreement, both countries will establish a permanent mechanism for continued trade discussions. This framework will be led by Secretary Scott Bessent from the US side and Vice Premier He Lifeng from China.
The announcement had an immediate impact on global markets. Hong Kong’s Hang Seng Index rose by 3%, with similar gains observed in US and European stock markets. Meanwhile, the price of gold—a traditional safe-haven asset—fell by 3%.
China’s Ministry of Commerce described the agreement as a “constructive breakthrough” in resolving mutual trade disputes, emphasizing that it would strengthen future ties based on cooperation and mutual respect.
