U.S. and China Agree to Slash Tariffs in Trade War Pause
The U.S. and China have reached a deal to reduce the steep tariffs they've been slapping on each other, marking a major pause in their escalating trade war. Starting on May 14th, U.S. tariffs on Chinese goods will drop from 145% to 30%, while China will cut its own tariffs on U.S. products from 125% to 10%. The tariff cuts will last for 90 days, giving both sides breathing room after months of tit-for-tat economic blows.
Talks held over the weekend in Geneva were described as unexpectedly productive, with both sides agreeing that the previous tariffs were doing more harm than good. “What had occurred with these very high tariffs was the equivalent of an embargo,” said U.S. Treasury Secretary Scott Bessent. He and U.S. Trade Representative Jamieson Greer emphasized the desire to maintain trade ties and build a more balanced economic relationship going forward. China’s Ministry of Commerce called the agreement an “important step” that sets the stage for deeper cooperation.
Markets responded swiftly to the announcement, with U.S. and European stocks jumping and shipping companies like Maersk seeing double-digit gains. Economists welcomed the development, but warned that deeper issues remain. A permanent resolution is still uncertain, and discussions around fentanyl trade and strategic sectors like semiconductors are continuing separately. “This is a big relief,” said economist Tianchen Xu, “but it’s just a ceasefire, not the end of the war.”
