Washington (Agencies): The United States and China have reached a landmark tariff agreement, rolling back most of the additional duties imposed since early April. The deal, announced in a joint statement on May 12, 2025, follows two days of negotiations in Geneva, marking a significant step toward de-escalating trade tensions between the world’s two largest economies.
Under the agreement, the US will suspend its 34% tariff on Chinese imports for 90 days, while China will do the same with its own 34% tariffs. Additionally, both nations will roll back all tariff hikes imposed since April 8, leaving a baseline 10% tariff on mutual imports. As a result, US tariffs on Chinese goods will stand at 30%, while Chinese tariffs on US imports will be set at 10%.
Beyond tariff reductions, China has agreed to ease non-tariff measures, including export controls on US goods. The new policies will take effect on May 14, and both countries will establish a consultation mechanism to discuss further trade policy steps.
The agreement comes after months of escalating tensions, which began on April 2, when President Donald Trump imposed sweeping tariffs on over 90 countries, including China, citing trade imbalances. Beijing responded with its own tariff hikes, leading to a tit-for-tat standoff that saw US duties peak at 145% and Chinese tariffs reach 125%.
US Treasury Secretary Scott Bessent described the Geneva talks as “productive,” while Trade Representative Jamieson Greer noted that the agreement was reached “quickly,” suggesting that the differences between the two sides were not as large as previously thought. China’s chief negotiator, Vice Commerce Minister Li Chenggang, called the discussions “honest, in-depth, and constructive”.
Following the announcement, global financial markets reacted positively. US stock indices surged, with Dow futures rising 1.1%, S&P 500 futures up 1.5%, and Nasdaq Composite gaining 2.1%. Chinese markets also rallied, with the CSI 300 up 0.6%, Shanghai Composite climbing 0.4%, and Hong Kong’s Hang Seng Index rising 0.9%.
The deal signals a potential reset in US-China trade relations, with both sides committing to continued communication, cooperation, and mutual respect. However, analysts caution that the 90-day suspension period introduces uncertainty, as tariffs could be reinstated if further negotiations falter.
This agreement marks a major shift in trade policy, offering hope for stability in global markets and potential relief for businesses impacted by the tariff war. Further discussions are expected in the coming months to solidify long-term trade strategies between the two economic powerhouses.