China and the United States reach deal to reduce tariffs

China and the United States have just agreed to a 90-day truce in their trade war, easing tensions between the world’s two superpowers. Following a high-level meeting held this weekend in Geneva, Switzerland, Washington and Beijing have decided to substantially reduce their tariffs imposed since April 2, when Donald Trump struck China with a first wave of tariffs on what he dubbed “Liberation Day.”

The United States will lower tariffs on Chinese goods from 145% to 30%, while China will reduce its tariffs on U.S. imports from 125% to 10%, according to the joint statement signed by both parties, published Monday and reported by Chinese state media.

According to the statement, both countries “recognized the importance of their bilateral economic and trade relationship to both countries and the global economy” and call for continued consultations. The document also includes a commitment to establish a mechanism to follow up on the economic and trade talks.

The move effectively means that the United States will grant China a partial moratorium similar to the one approved on April 9 for other countries. At that time, facing intense pressure from financial markets, as well as criticism from within his own Republican Party, business leaders, and investors, Trump paused the so-called “reciprocal” tariffs for 90 days — except for China, which he punished for retaliating. All other countries were left with a universal 10% tariff.

The tariff on China will remain at 30%, as the United States reduces its tariff to 10% — the same rate applied to other countries — along with the 20% tariffs that Trump had previously imposed on China due to Washington’s claim Beijing is not doing enough to stop exports of fentanyl precursors.

The agreement comes close, but not entirely, to fulfilling one of China’s key demands for entering negotiations on equal terms: that the United States remove its tariffs before any talks could begin.

The Chinese side has spoken positively about the Geneva meeting, the first high-level discussion between U.S. and Chinese officials since Trump, newly installed in the White House, fired the first shots of his trade war in February.

The talks were “candid, in-depth, and constructive,” said Chinese Vice Premier He Lifeng — the head of China’s delegation and Xi Jinping’s trusted economic and trade czar — during a press briefing Sunday night in Geneva. He described the two days of closed-door meetings as “an important step towards through equal dialogue and consultation.”

Scott Bessent, the U.S. Treasury Secretary and one of Trump’s envoys to the talks in Switzerland, said Monday that both countries had “represented their national interest very well,” during the talks. “We both have an interest in balanced trade, the U.S. will continue moving toward that,” he said, as reported by Reuters. Bessent had already indicated on Sunday that the conversations were “productive” and had yielded “substantial progress” in a trade relationship that had become unsustainable.

Ahead of the Geneva talks, Bessent had warned that the current level of tariffs between the two nations amounted to a de facto “trade embargo” in what is one of the world’s closest trading relationships, valued at around $660 billion last year.

Amid the back-and-forth escalation, China imposed duties of up to 125% on U.S. goods and said it would ignore further tariff hikes from Washington, arguing the exchange had turned into a numbers game that would “become a joke in the history of the world economy,” according to a Chinese Ministry of Commerce spokesperson at the time.

The effects of the tariffs had begun to show in recent weeks — delayed shipments, production lines paused, and plans to relocate supply chains. Chinese exports to the U.S. fell by 21% in April, according to official government data released Friday — a drop smaller than expected, but still significant.

In its latest forecast, the International Monetary Fund lowered projected global growth for 2025 by 0.5 points; the cut was 0.9 points for the U.S. and 0.6 for China. With financial markets shaken and economic outlooks deteriorating, pressure had been mounting to end the standoff between the global giants.

The deal reached Monday opens a window in which both powers can engage in more meaningful trade dialogue. In 2018, following the first tariff war launched by Trump, Washington and Beijing ended their dispute by signing a major trade agreement.

Some analysts had predicted that a breakthrough in Geneva could also pave the way for a long-awaited phone call between the two leaders. Trump and Xi haven’t spoken since January 17, three days before Trump’s inauguration. “Matching Washington’s tariff cuts would be a sign that Beijing is ready to move past all this mess,” analysts at Trivium China commented on Friday. “If things go well, Trump said he ‘might’ speak with Xi Jinping after the talks. If Xi picks up the phone, markets will soar Monday.”

Although no call has been announced, markets reacted with enthusiasm to the news. The joint statement also includes a commitment to create a follow-up mechanism for economic and trade talks. China will be represented by He Lifeng, and the U.S. by Scott Bessent and Jamieson Greer, the Trump administration’s international trade representative. “These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties,” the agreement reads.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition