U.S. and China reach deal to slash tariffs

Thomson Reuters

· Posted: May 12, 2025 5:03 AM EDT | Last Updated: 6 minutes ago

The United States and China person agreed a woody to temporarily slash reciprocal tariffs arsenic the world's 2 biggest economies question to extremity a damaging commercialized warfare that has stoked fears of recession and acceptable fiscal markets connected edge.

Speaking aft talks with Chinese officials successful Geneva, U.S. Treasury Secretary Scott Bessent said the 2 sides had agreed connected a 90-day intermission connected measures and that tariffs would travel down by implicit 100 percent points to a 10% baseline rate.

"Both countries represented their nationalist involvement precise well," Bessent said connected Monday. "We some person an involvement successful balanced trade, the U.S. volition proceed moving towards that."

The dollar roseate against large currencies and markets lifted pursuing the news, which helped allay concerns astir a downturn triggered past period by U.S. President Donald Trump's escalation of tariff measures aimed astatine narrowing the U.S. commercialized deficit.

EARLIER | U.S. officials assertion a woody is adjacent aft 2 days of talks with China: 

Bessent was speaking alongside U.S. Trade Representative Jamieson Greer aft the play talks successful Switzerland successful which some sides had hailed advancement connected narrowing differences.

"The statement from some delegations this play is neither broadside wants a decoupling," Bessent said. "And what had occurred with these precise precocious tariffs ... was the equivalent of an embargo, and neither broadside wants that. We bash privation trade."

The Geneva meetings were the archetypal face-to-face interactions betwixt elder U.S. and Chinese economical officials since U.S. President Donald Trump returned to powerfulness and launched a planetary tariff blitz, imposing peculiarly hefty duties connected China.

Since taking bureau successful January, Trump has hiked the tariffs paid by U.S. importers for goods from China to 145 per cent, successful summation to those helium imposed connected galore Chinese goods during his archetypal word and the duties levied by the Biden administration.

China deed backmost by putting export curbs connected immoderate uncommon world elements, captious for U.S. manufacturers of weapons and physics user goods, and raising tariffs connected U.S. goods to 125 per cent.

The tariff quality brought astir $600 cardinal successful two-way commercialized to a standstill, disrupting proviso chains, sparking fears of stagflation and triggering immoderate layoffs.

Financial markets were buoyed by the latest thaw successful the commercialized warfare and Wall Street banal futures climbed arsenic the talks boosted hopes a planetary recession mightiness beryllium avoided.

"This is amended than I expected. I thought tariffs would beryllium chopped to determination astir 50 per cent," said Zhiwei Zhang, main economist astatine Pinpoint Asset Management successful Hong Kong.

"Obviously, this is precise affirmative quality for economies successful some countries and for the planetary economy, and makes investors overmuch little acrophobic astir the harm to planetary proviso chains successful the abbreviated term," Zhang added.

Following the talks connected Sunday, U.S. officials touted a "deal" to trim the U.S. commercialized deficit, portion Chinese officials said the 2 had reached an "important consensus" and agreed to motorboat different caller economical dialog forum.

Trump gave a affirmative speechmaking of the talks earlier they had concluded, saying that the 2 sides had negotiated "a full reset... successful a friendly, but constructive, manner."

The U.S. president levied the tariffs successful portion aft declaring a nationalist exigency implicit fentanyl entering the United States, and Greer said conversations implicit curbing the deadly opioid were "very constructive" though connected a abstracted track.

Chinese Vice Premier He Lifeng was little categorical successful his declarations but inactive hailed "substantial progress" pursuing the talks that were held astatine the gated, backstage villa of the Swiss ambassador to the United Nations overlooking Lake Geneva.