Smoothing Trade Waters: Temporary Tariff Reduction Deal Between China and USA
Reduced Tariff Pact: Tariffs between China and the U.S. mutually decreased - Tentative deal reached: lesser tariffs for China and the United States on traded goods
In a significant move, China and the US have decided to take a step back from their escalating trade war. According to a joint statement, both giants will temporarily lower their tariffs during the following 90 days.
Slashing US Tariffs on Chinese Imports
The US will slash their sky-high tariffs on Chinese imports, bringing the rates down from a punishing 145% to a more manageable 30%. Similarly, China retaliates with a reduction of their tariffs on US goods from 125% to 10%.
During discussions held in Geneva, both countries expressed signs of progress in negotiations—though they remained tight-lipped about the specific details. According to Chinese reports, both sides agreed to set up a consultation mechanism for economic and trade issues, as stated by Vice-Premier He Lifeng. This meeting in Geneva marked a crucial step towards resolving their differences through open dialogue, paving the way for further collaboration.
A Potential Breakthrough in Talks
The US reports have hinted at an agreement in the tariff dispute, which could mark the end of the standoff in the trade conflict. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer led the talks, among others.
The two powerful economies, China and the US, have been at odds for some time now. Their imposed tariffs hampered trade between the countries, which also affected the global economy at large.
More Than Just Tariffs
The recent agreement encompasses more than just tariff reduction. As part of the deal, China will temporarily suspend 24 percentage points of their additional tariffs on US goods, retaining a 10% tariff during this 90-day period. Simultaneously, the US will lessen tariffs on Chinese imports. Moreover, China has agreed to postpone or eliminate non-tariff measures taken against the US since April 2, 20251.
The agreement also includes establishing a mechanism for continued discussions between the two nations on economic and trade relations. Representatives from both sides will meet alternately in the US, China, or a third country2.
This temporary reduction in tariffs and the suspension of non-tariff measures are expected to ease trade tensions, potentially stabilizing global markets1. Economists predict that the reduction in US tariffs on Chinese imports could significantly decrease the negative economic impact of the 2025 tariffs, with estimates suggesting a 40% reduction in these negative economic effects3. As trade tensions ease and global trade dynamics normalize, other countries may reassess their trade policies, potentially leading to more favorable conditions for international trade1.
All in all, this agreement is hopefully a positive step towards resolving trade disputes and fostering increased cooperation in the global economy.
- China
- USA
- Tariffs
- Global Economy
[1]: BBC News
- The Commission has also been consulted on the draft budget regarding the temporary tariff reduction deal between China and the USA, as this agreement could have significant implications for the global economy and international trade policies.
- This development in finance, politics, and general-news, concerning the tariff reduction between China and the US, brings hope for improved business relations and cooperation, potentially influencing the direction of the global economy in the near future.
