By Charles Maduka
The United States and China have agreed to significantly reduce tariffs for a 90-day period, marking a temporary stop in the ongoing trade war that has shaken global financial markets.
Following high-level talks in Geneva, both countries issued a joint statement announcing the rollback of steep tariffs that were previously imposed. US President Donald Trump had earlier slapped a 145 percent duty on Chinese imports, while China responded with a 125 percent tariff on American goods.
Under the new agreement, the US will lower its tariffs on Chinese products to 30 percent, while China will reduce its duties to 10 percent. The negotiations were led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, alongside trade representative Li Chenggang. Bessent described the talks as “productive” and “respectful.”
The meeting, hosted discreetly at the Swiss ambassador’s residence in Geneva, resulted in what Beijing called “substantial progress.” The Chinese commerce ministry emphasized the agreement benefits not only both nations but also the global economy. It expressed hope that the US would continue working with China to avoid further tariff increases.
Markets responded positively to the development, with stock indices and the US dollar rebounding after recent volatility linked to the trade conflict.
Despite the reduction, a separate 20 percent US tariff on Chinese chemical exports used in fentanyl production will remain in place. However, both countries agreed to collaborate on addressing the fentanyl issue, signaling room for future cooperation.
The agreement also includes a new mechanism to facilitate continued discussions on trade and economic relations. Regular or ad hoc consultations will be held in either country or a mutually agreed third location.
Economic analysts have welcomed the development. Zhiwei Zhang, chief economist at Pinpoint Asset Management, described the outcome as a “success” for China, noting that the country stood firm and secured tariff reductions without making major concessions. Wang Wen of Renmin University called the deal the “biggest easing of tensions” since the trade war began but warned that the situation could deteriorate again if no further progress is made over the next three months.
The trade dispute had intensified fears of global economic instability, with concerns about inflation and slowing growth. The talks in Geneva came shortly after President Trump signed a new trade agreement with the United Kingdom, his first since launching the global tariff campaign.
Ngozi Okonjo-Iweala, Director-General of the World Trade Organization, praised the talks as a “significant step forward,” noting the potential benefits for both nations and vulnerable economies around the world.
The next 90 days are expected to be crucial in determining whether the world’s two largest economies can achieve a lasting trade resolution.
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