The United States and China agreed Monday to significantly reduce tariffs and pause their trade war for 90 days to allow for further negotiations, marking a major de-escalation in a dispute that has rattled global markets.
U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent announced the agreement following two days of talks in Geneva. The U.S. will cut its tariffs on Chinese goods from 145% to 30%, while China will reduce its duties on American products from 125% to 10%.
“The consensus from both delegations this weekend is that neither side wants a decoupling,” Bessent said. “These very high tariffs had effectively become an embargo, and neither side wants that. We do want trade.”
China’s Commerce Ministry said both countries agreed to cancel 91% of the tariffs imposed on each other’s goods and suspend an additional 24% for the duration of the 90-day truce, totaling a rollback of 115 percentage points.
The ministry described the deal as a key step toward resolving trade tensions and laying the groundwork for continued cooperation. “This initiative aligns with the expectations of producers and consumers in both countries and serves the interests of both nations as well as the common interests of the world,” the ministry said in a statement.
Markets rallied on news of the agreement, which follows a sharp escalation last month when President Donald Trump raised tariffs to a record 145%, prompting retaliatory measures from Beijing. The tit-for-tat levies had threatened to freeze trade between the world’s two largest economies, which reached $660 billion last year.
The agreement comes as a relief to businesses and consumers caught in the crossfire of the trade war and signals a willingness on both sides to return to the negotiating table.