Victor EzejaThe United States and China have agreed to drastically reduce trade tariffs on each other’s goods for an initial period of 90 days.
The agreement, which was reached on Monday after days of intense negotiations, is considered the first major breakthrough in efforts to de-escalate the ongoing trade war between the two countries.
Join our WhatsApp ChannelThe two countries met in Geneva, Switzerland. The U.S. was represented by the U.S. Treasury Secretary, Scott Bessent, while China was represented by He Lifeng, Vice Premier of the State Council.
The meeting was the first between the two countries since US President Donald Trump imposed high tariffs on Chinese imports in April.
President Trump had last month announced a universal baseline tariff on all imports to the US, on what he called “Liberation Day”. It imposed a 125 per cent tariff on imports from China, which triggered a trade war. After Beijing retaliated by slamming the U.S. with a 125 per cent tariff, the White House imposed an additional 20 per cent on the Asian tiger over trade in fentanyl, a powerful opioid drug.o This raised it to a 145 per cent tariff on Chinese imports.
READ ALSO: U.S. Tech Giants Walk A Tightrope Through Trump’s Tariffs
According to a joint statement on Monday, the meeting was in recognition of the importance of “a sustainable, long-term, and mutually beneficial economic and trade relationship” between both countries.
According to the statement, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.
This effectively means the United States will reduce its overall tariffs on Chinese goods from 145 per cent to 30 per cent, while China will slash its levies on American imports from 125 per cent to 10 per cent, according to the joint statement.
The statement said the parties have agreed that the tariff reduction takes effect from 14 May 2025.
The statement also indicated that China will take “all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.”
READ ALSO: How Tariffs Are Triggering Trade War Between US, China, Canada
The parties will, after taking the aforementioned actions, establish a mechanism to continue discussions about economic and trade relations.
According to the statement, “The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the U.S. side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative.
“These discussions may be conducted alternately in China and the United States, or a third country, upon agreement of the parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues.”
Despite the interim tariff reductions, analysts caution that long-term agreements may take longer to materialize. Similar de-escalation efforts failed in 2018, resulting in tariffs and trade tensions that persisted until the “Phase One” agreement in January 2020.
China had struggled to achieve its responsibilities under the pact, while the United States’ trade imbalance increased throughout the pandemic, resulting in the latest round of economic conflicts between Washington and Beijing.
While markets applaud signals of progress, many observers remain wary, waiting to see if this 90-day tariff decrease leads to a more complete trade agreement or simply delays another escalation.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
