Jamey Keaten, David Mchugh, Elaine Kurtenbach, Ken Moritsugu, Associated Press
GENEVA (AP) – US and Chinese officials said Monday that they have reached a contract that rolled back most of the recent tariffs, calling a 90-day truce in the trade war and allowing further consultations on the resolution of trade disputes.
Stock markets rose sharply as Grove’s two major economic forces stepped back from the conflict that destabilized the global economy. The economists warned that tariffs remained higher than before and that the outcome of future consultations is uncertain.
US trade representative Jamieson Greer said the US agreed to lower the 145% tariff rate on Chinese goods by 30% to 115 percentage points, but China agreed to lower the US goods rate by 10% to the same amount.
Transactions avoid total lockdown
Greer and Treasury Secretary Scott Bescent announced the tariff cuts at a press conference in Geneva.
The two officials hit a positive tone as they said they had set up consultations to continue discussing trade issues. In a news briefing after the two-day talk, Bessent said high tariff levels would be a complete blockage of goods on each side.
“The consensus from both delegations this weekend is that neither side wants decoupling,” Bescent said. “And what happened with these very high tariffs was an embargo, and it amounted to an embargo. Neither side wants that. We want trade.”
“We want a more balanced trade,” he said. “And I think both sides are committed to achieving that.”
The delegation escorted the town, protected by Swiss police scores, and met at least 12 hours on both weekends in a tanned 17th-century villa that served as the official residence of the Swiss ambassador of the United Nations in Geneva.
Sometimes, delegation leaders separated from staff and settled on the couch on the villa’s patio overlooking Lake Geneva, helping to deepen their personal connections to reach a highly popular deal.
Finally, the transaction
China’s Commerce Ministry said the two agreed to cancel 91% on tariffs on each other’s goods and suspend an additional 24% on 90-day tariffs, bringing the total cut to 115% points.
The ministry called the agreement an important step towards resolving differences between the two countries and said it would lay the foundation for further cooperation.
“This initiative is consistent with the expectations of producers and consumers in both countries and contributes to the interests of both countries and the common interests of the world,” the Ministry’s statement said.
China hopes that the US will stop “misconducting unilateral tariff hikes” and work with China to protect the development of economic and trade relations and inject certainty and stability into the global economy, the ministry said.
A joint statement issued by the two countries said China has agreed to suspend or remove other measures taken since April 2 in response to US tariffs.
China has increased rare earth export controls, including those important to the defense industry, added more American companies to export controls and unreliable entities lists, restricting business and restricting them in China.
The market brings together as two aspects expand
The full impact on the complex tariffs and other trade penalties enacted by Washington and Beijing remains unknown. It also depends heavily on finding ways to fill the differences over the years during the 90-day suspension.
In an interview with CNBC, Bessent said US and Chinese officials will meet again in a few weeks.
However, investors were delighted as trade envoys from the world’s two biggest economies blink, found a way to pull back from global trade and potentially massive disruptions into their own markets.
S&P 500 futures increased by 2.6%, while Dow Jones Industry Average rose by 2%. Oil prices skyrocketed over $1.60 per barrel, with the dollar earning against the euro and Japanese yen.
“It’s a substantial de-expansion,” said Mark Williams, Chief Asian Economist at Capital Economics. However, he warned, “There is no guarantee that a 90-day ceasefire will give way to a permanent ceasefire.”
Dani Rodrik, an economist at Harvard University, said the two countries have returned “from an unnecessary trade war” but US tariffs on China remain at 30% and “will mainly hurt American consumers.”
Posting on Brukey, Rodrick wrote, “Trump never got anything from China due to all the chaos he created. Jilch.”
Last month, Trump raised tariffs in China to a total of 145%, and China retaliated by hitting US imports with 125% collection. High tariffs existed essentially in both countries boycotting each other’s products, disrupting trade that last year exceeded $660 billion.
An announcement by the US and China has resulted in a surge in stocks, with US futures jumping by more than 2%. Hong Kong’s Hangsen index surged by nearly 3%, while Germany and France’s benchmarks rose by 0.7%
The Trump administration has imposed tariffs on countries around the world, but the fight against China was the most intense. Trump hasn’t done enough to stop human trafficking with the precursor chemicals used to make synthetic opioid fentanyl, Trump said he is being subject to import taxes on goods from China.
“We’ve seen a lot of effort into making it,” said Eswar Prasad, a professor of trade policy at Cornell University.
“Nevertheless, it is a precursor to the global economy that US tariffs could ultimately become a significant trade barrier, but they may not be a prominent barrier to completely block international trade,” he said.
McHugh was a contribution from Frankfurt, Germany. Kaltenbach from Mito, Japan. Mori Village from Beijing. Washington Associated Press Writer Paul Wiseman contributed to the report.
Original issue: May 12, 2025 7:11am EDT
