Geneva (TDI): After extensive talks between Chinese and American trade officials in Geneva, Switzerland, the US and China have agreed to lower reciprocal tariffs on each other by 115% for ninety days.
Reciprocal tariffs were mounting up as both countries got tied up in a loop, triggering a trade war and bringing global economy on edge, since President Trump announced import tariffs on dozens of countries, on April 2, 2025 – the day he dubbed as “Liberation Day.”
The agreement on substantially lowering tariffs was announced by the US Treasury Secretary, Scott Bessent, in a press brief.
President Trump had imposed a 145% tariff on Chinese imports, while Beijing responded with a 125% levy on some US goods.
With the new agreement, the tariffs on Chinese imports entering the US will now be 30% for 90 days and tariffs on US products imported into China will be 10% for the corresponding period.
The talks in Geneva were the first ever formal talks between China and the US, following a tough stance and statements by both countries, earlier.
As both countries were taking time to enter into formal negotiations, fears were high among the stock markets and financial experts that if prolonged, the trade tension will might lead to a global recession.
With the announcement of the tariffs cut, global stock markets and dollar surged. Dow futures jumped more than 2%, while S&P 500 futures rose nearly 3%, and the tech-heavy Nasdaq Composite futures went up more than 3.5% during Asian afternoon trading.
In the joint statement, both countries recognized “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship.”
The new tariffs will take effect by May 14, 2025.
Nuzhat Rana is the Managing Editor (website) at The Diplomatic Insight.
