The US and China have reached a mutual agreement to reduce tariffs by 115% for 90 days as the two countries continue to negotiate a long-term deal. The deal was made over the weekend in Geneva and will see the US lowering additional tariffs on Chinese goods from 145% to 30%, while China will lower duties on US imports to 10% from 125%.
To recap, the US administration introduced new tariffs in April, which raised rates against China to 54%. The US later raised the tariffs to 104%, causing China to respond with an 84% tariff on US imports and a restriction on exports of rare earth materials. This prompted the US to raise the tariffs for China again, and after announcing a pause on tariffs for the rest of the world, continued to increase the rates for Chinese goods.
The White House asserted that the agreement was a “historic trade win” for the country and that it demonstrated President Trump’s “unparalleled expertise in securing deals that benefit the American people”. According to US Treasury Secretary Scott Bessent, both countries wish to avoid a severing of their economies, but the US still intends on imposing tariffs on specific items that the White House wants to be produced in the country.
Following the announcement of the temporary truce, global stocks rose as the news eased some concerns that the trade war would adversely affect the economy. That said, it is unclear what will happen once the three-month pause comes to an end as the two countries are still in talks for a final trade deal. In a joint statement from the two nations, the governments acknowledged the significance of a sustainable, long-term trade relationship that is mutually beneficial.
(Source: Ars Technica)
