US-China Tariff Truce: 90-Day Deal Slashes Duties from 145% to 30% Starting May 14
In a significant breakthrough, the United States and China have agreed to a 90-day suspension of punitive tariffs, offering a strategic pause in the escalating trade war that has gripped global markets for years. The deal, finalized in Geneva, will see tariffs reduced dramatically on both sides, bringing hope of a longer-term resolution.
According to a joint statement issued by U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, starting May 14, the U.S. will lower tariffs on Chinese goods from 145% to 30%, while China will reduce its tariffs on American products from 125% to just 10%.
Key Takeaways from the Agreement
1. Major Tariff Cuts
- U.S. Tariffs on Chinese Imports:
Reduced from 145% to 30%, effective May 14, 2025 - China’s Tariffs on U.S. Products:
Slashed from 125% to 10% on the same date
These are some of the steepest tariff reductions witnessed in recent U.S.-China trade history, affecting billions in trade value.
2. Duration: 90-Day Pause
This rollback will be in effect for an initial 90-day period, during which both sides will engage in further technical discussions. The goal is to reach a more sustainable and long-term trade agreement beyond this temporary window.
3. Formation of a New Dialogue Mechanism
To maintain momentum and ensure follow-up:
- A tripartite leadership group will be established:
- Scott Bessent, U.S. Treasury Secretary
- Jamieson Greer, U.S. Trade Representative
- He Lifeng, Vice Premier of China
- Future talks may occur in China, the United States, or third-party nations upon mutual agreement.
- Technical-level meetings will be held as required to resolve sector-specific issues.
4. Broader Cooperation Initiatives
Fentanyl Control
China has pledged enhanced enforcement against the production and export of fentanyl, a key U.S. demand due to its link to the domestic opioid crisis.
Economic Decoupling Avoidance
Both nations emphasized the need to avoid full economic decoupling, highlighting their mutual dependency and global economic responsibility.
Market Reaction and Global Impact
Following the announcement:
- S&P 500 Futures jumped 2.8%
- The U.S. Dollar Index rose by 0.7%
- Gold prices dropped 2.3%
- Asian stock markets opened significantly higher
Investors and multinational corporations welcomed the deal as a positive signal for global trade and economic stability.
Strategic Importance of the Tariff Rollback
The $600 billion trade relationship between the U.S. and China had been severely strained due to years of tit-for-tat tariff escalations. This rollback:
- Eases cost pressures on importers and exporters
- Reduces global supply chain volatility
- Signals renewed diplomacy and de-escalation
However, experts caution that deep-rooted issues still remain and that trust must be rebuilt for a permanent resolution.
Challenges Ahead
Despite the temporary truce, the road to a full agreement is uncertain:
- Past trade promises, such as China’s earlier pledge to increase U.S. agricultural purchases, have not been fully honored.
- Core disputes, including intellectual property rights, state subsidies, and technology transfers, remain unresolved.
- There is still widespread skepticism in global policy circles about whether either side will commit beyond short-term gains.
What Happens After 90 Days?
The next steps will be critical. If no long-term deal is reached:
- Tariffs could snap back to previous punitive levels
- Investor confidence may falter
- Trade tensions could re-escalate, impacting global GDP
However, if this 90-day window leads to tangible breakthroughs, it could mark the beginning of a new era in U.S.-China economic cooperation.
Watch Full Coverage
For a complete analysis and official statements, watch the press briefing and expert commentary on YouTube:
Conclusion
This 90-day tariff rollback deal is the most meaningful sign of progress in U.S.-China trade relations in years. With tariffs being slashed from 145% to 30% by the U.S., and from 125% to 10% by China, the agreement provides a moment of relief for global markets and opens a path for deeper economic dialogue.
However, its success depends entirely on what happens after these 90 days. The world will be watching closely.
- Image Credits: Freepik
