The US and China have unexpectedly agreed to cut tariffs on each other’s goods for the next 90 days. This move eases the long-standing trade war, which had shaken global markets and hurt diplomatic ties.
The announcement came Monday after intense talks over the weekend in Geneva. Officials from both countries spoke of “substantial progress” and their goal to build a trade relationship that lasts and benefits both sides.
What the Agreement Includes
As part of the deal, the US will lower tariffs on Chinese imports from 145% to 30%. China will cut its tariffs on US goods from 125% to 10%. These changes will start on Wednesday, May 14.
Some tariffs will stay. The US will keep its 20% tariffs on fentanyl, which were imposed earlier this year.
Oversight and Future Talks
Both countries agreed to set up a formal group to keep talking about trade. This team will be led by Chinese Vice Premier He Lifeng and US officials Scott Bessent and Jamieson Greer. They will take turns hosting talks in different locations and have meetings at different levels to discuss big issues.
At a news conference in Geneva, Bessent said both countries want to prevent further separation of their economies. “Both sides do not want to be cut off from each other,” he said. “They want better, more balanced trade.”
Positive Market Reaction
Markets reacted well to the news. US stock futures jumped, with Dow futures up over 2%, S&P 500 futures almost 3%, and Nasdaq futures climbing more than 3.5% during Asian trading hours. In Hong Kong, the Hang Seng index rose by over 3%.
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