The US and China have agreed to massively roll back tariffs on each other’s goods for an initial 90-day period, de-escalating a global trade war.
The announcement comes after a weekend of marathon trade negotiations in Geneva, Switzerland by officials from the world’s two largest economies.
Major breakthrough: The substantial, if temporary, agreement was unexpected. Just last week, Bessent sought to manage expectations by suggesting that his goal for the talks was “de-escalation” of tension and not “a big trade deal,” as the US and China had been at a virtual stalemate since President Donald Trump imposed his tariff policy.
The speed of the talks’ progress seemed to surprise even US Trade Representative Jamieson Greer:
“It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as far as maybe thought,” he said Sunday.
Trade Representative Li Chenggang had hinted at the tariff cuts when pressed by a reporter on Sunday for more detail about today’s announcement:
“As regards the timing for the release of the joint statement, as we say back in China, if the dishes are delicious, then timing is not a matter. So I think no matter when this statement is released, it’s going to be … big news, good news for the world,” he said.
Beijing’s upbeat and positive tone stands in stark contrast to its previous statements about the trade conflict with the US. For weeks, Chinese officials had struck a defiant tone, demanding the US remove all tariffs on China before agreeing to come to the negotiation table.
Brief relief: There had been a tit-for-tat escalation between the US and China since April, when Trump tacked 34% reciprocal tariffs on Chinese goods and upped that rate to 145% days later. China retaliated with 125% on US goods.
Economists have said 50% is the make-or-break threshold for the return of somewhat normal business between the US and China.
Scramble to secure deals: White House officials have made clear they view the China talks as an entirely different endeavor than broader efforts to seal trade agreements with dozens of other nations. Those negotiations are on the clock after Trump’s decision to pause the April 2 “reciprocal” tariff rates for 90 days.
The deal Trump announced with the UK last week has maintained a 10% tariff rate but had some carve-outs for British cars, planes, steel, aluminum and beef.
