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The United States and China announced Monday a 90-day suspension of major tariffs, marking a dramatic de-escalation in a trade war that had rattled global markets and strained relations between the world’s two largest economies.
Under the deal, U.S. tariffs on Chinese imports will drop from 145% to 30%, while China will cut its retaliatory tariffs from 125% to 10%, according to a joint statement released after high-level negotiations in Geneva, Switzerland.
The breakthrough comes after months of tit-for-tat tariff hikes that began in April when President Donald Trump announced sweeping import duties, accusing China of unfair trade practices. In turn, Beijing responded with steep levies and non-tariff measures, triggering a rapid escalation.
“This was a very constructive and positive dialogue,” said U.S. Trade Representative Jamieson Greer, who led the American delegation. “Both sides clearly came to deal this week.”
Treasury Secretary Scott Bessent emphasized the mutual damage caused by the tariff standoff. “It was the equivalent of an embargo,” Bessent said. “We do want trade — just more balanced trade.”
The deal will provide immediate relief to U.S. importers and Chinese exporters, both of which have suffered from rising costs and canceled orders. Economists and business groups praised the agreement but cautioned that it is a temporary reprieve, not a permanent solution.
Markets responded with enthusiasm:
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Dow Jones Industrial Average: up 2.1%
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S&P 500 Index: up 2.8%
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Nasdaq Composite: up 3.8%
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Hong Kong’s Hang Seng Index: up 3.2%
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European markets also posted gains, though more modest.
Chinese officials hailed the move as an “important step” toward narrowing economic differences. “It is hoped the U.S. will continue in the same direction,” a spokesperson for China’s Ministry of Commerce said.
Both sides agreed to set up a mechanism for continued discussions, alternating between locations in the U.S., China, or neutral venues. Greer and Bessent will continue to represent the U.S., while China will be represented by Vice Premier He Lifeng.
Separate talks are ongoing about China’s role in global fentanyl trafficking, and some older U.S. tariffs remain in effect. Greer called those negotiations “on a very positive track.”
The pause already appears to be having an impact: shipping volumes from China to the U.S. have plummeted since early April, as companies braced for extended tariffs. Danish shipping giant Maersk called the deal “a step in the right direction.”
Economists in both countries expressed cautious optimism.
“This will save medium and small enterprises on both sides of the Pacific,” said Tianchen Xu of the Economist Intelligence Unit.
“It’s a very big relief for small Chinese exporters who’ve lost U.S. orders for weeks,” he added.
