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The United States and China have reached a breakthrough agreement to slash high import tariffs, marking a major step in easing their ongoing trade.
US Treasury Secretary Scott Bessent said both countries will reduce reciprocal tariffs by 115 percent for 90 days, after both countries held talks in Switzerland – the first since the US imposed steep duties.
Markets soared on news of the deal. Just weeks ago, President Donald Trump announced a baseline tariff on all imports to the US, sparking fears of a global recession. China retaliated, and tariffs between the two countries reached as high as 145 percent.
Under the new terms, most tariffs will be suspended or reduced, with US duties on Chinese goods cut to 30 percent and China’s tariffs on US imports lowered to 10 percent, starting May 14.
However, the US will maintain an additional 20 percent tariff on some Chinese products to pressure Beijing to curb the illegal trade in fentanyl.
Bessent said neither country wants a full economic split. “What had occurred was the equivalent of an embargo. We want more balanced trade,” he said.
China’s commerce ministry called the agreement “an important step” toward resolving differences and deepening cooperation.
The deal follows growing concerns in both countries: US ports reported falling shipments from China, while Chinese factories cut output and laid off workers.
Analysts say the truce is a significant de-escalation, though prices will remain high. “Trade will continue, but at a higher cost,” said economist Neil Shearing.
The stock market reacted quickly. Maersk and Hapag-Lloyd jumped 12 – 14 percent, while gold prices fell 3 percent as risk eased.
A joint statement said US and Chinese officials will now meet regularly to manage trade relations, led by Bessent and China’s Vice Premier He Lifeng.
