U.S. and China Agree to Temporary Tariff Rollbacks in Major Trade Breakthrough

The United States and China have agreed to a 90-day reduction of steep tariffs on each other’s goods, signaling a significant thaw in trade tensions that have rattled global markets and disrupted supply chains in recent months, according to a joint statement released Monday.

The breakthrough followed intensive weekend talks in Geneva between U.S. Treasury Secretary Scott Bessent, Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng. As reported by NPR, the U.S. will lower tariffs on Chinese goods from as high as 145% to 30%, while China will reduce its tariffs on American imports from 125% to 10%.

However, the 20% U.S. tariff related to China’s alleged role in fentanyl production will remain in place. “We concluded that we have shared interests, and we both have an interest in balanced trade,” Bessent said at a press conference.

As reported by The Guardian, the agreement came in response to soaring trade barriers imposed in April, which effectively paralyzed bilateral trade and alarmed businesses on both sides. “The consensus from both delegations this weekend was neither side wants a decoupling,” Bessent said.

China’s Ministry of Commerce praised the decision, calling it “an important step by both sides to resolve differences through equal-footing dialogue and consultation,” according to CNN. Beijing also agreed to suspend or cancel retaliatory non-tariff measures, which previously included restrictions on critical mineral exports essential to U.S. tech manufacturing.

Vice Premier He described the talks as “candid, in-depth, and constructive,” stating they had achieved “substantial progress and reached important consensus,” as reported by NPR. Greer echoed this sentiment, noting the two sides had agreed to a consultation mechanism for future talks and made progress on fentanyl-related discussions.

Financial markets responded positively. According to CNN, U.S. stock futures surged, with tech-heavy Nasdaq-100 contracts rising over 3.5%, while China’s yuan climbed to a six-month high. European shares and commodity prices also jumped, buoyed by the de-escalation.

Still, the deal is temporary. “While the Chamber is encouraged by the decision, uncertainty remains,” said Jens Eskelund, president of the European Union Chamber of Commerce in China, as reported by NPR.

The tariff rollbacks will be implemented by Wednesday and reviewed after the 90-day period.