The United States and China have agreed to significantly lower reciprocal tariffs for 90 days, offering a temporary reprieve in a trade war that has rattled global markets and raised fears of recession.
Under the deal announced Monday, the U.S. will reduce its tariffs on Chinese goods from 145% to 30%, while China will cut its retaliatory duties on U.S. imports from 125% to 10%. The agreement was reached during two days of high-level talks in Geneva and marks the first direct breakthrough between the two economic superpowers since President Donald Trump’s return to office.
“This is better than I expected,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “This helps calm concerns about global supply chains.”
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer announced the rollback, emphasizing that both nations wanted to avoid a “decoupling” of their economies. Bessent called the earlier tariff levels the “equivalent of an embargo.”
Global stock markets surged on the news, with U.S. futures up over 2% and Hong Kong’s Hang Seng Index jumping nearly 3%. European firms like Maersk, LVMH, and Kering also saw sharp gains after suffering from the disrupted trade.
While no sector-specific changes were outlined, Greer said negotiations will continue, and strategic rebalancing in critical sectors like pharmaceuticals and semiconductors remains a priority.
Trump hailed the deal as a “total reset” and praised both nations for negotiating in a “friendly, but constructive, manner.”
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