In a significant de-escalation of the intensifying trade war, the United States and China jointly announced on Monday a 90-day reduction in tariffs following high-stakes negotiations held in Geneva, Switzerland. The agreement, hailed as a breakthrough by both sides, will temporarily ease some of the most punishing levies imposed since President Donald Trump’s April 2 tariff escalation.
The temporary reprieve slashes tariffs dramatically on both sides:
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U.S. tariffs on Chinese goods will fall from 145% down to 30%, a 115-percentage-point cut.
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Chinese tariffs on U.S. exports will be reduced from 125% to 10%, also a 115-point reduction.
The agreement retains a 10% ad valorem rate from the original April 2 package and maintains the right to reinstate higher rates after the 90-day window, should talks falter.
China also agreed to suspend or remove all non-tariff countermeasures adopted since April 2, signaling a broad effort to cool trade tensions. The measures must be implemented by Wednesday, adding urgency to the rollout.
🚨CNBC on the trade deal with China: “Here in Geneva, we witnessed marathon talks over the last two days… and they’ve yielded a major breakthrough.
— Benny Johnson (@bennyjohnson) May 12, 2025
This move marks the first tangible cooling in the economic conflict that had seen tariff levels soar as high as 145% and 125%, respectively, between the world’s two largest economies.
The joint statement highlighted a shared goal of “a sustainable, long-term, and mutually beneficial economic and trade relationship.” While not a permanent solution, the 90-day truce is a clear effort to prevent further damage to global markets, strained supply chains, and domestic inflation.
Alongside the tariff reductions, both governments committed to establishing a bilateral consultation mechanism. This forum will be co-led by:
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Chinese Vice Premier He Lifeng
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U.S. Treasury Secretary Scott Bessent
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U.S. Trade Representative Jamieson Greer
The platform will allow regular negotiations and working-level consultations, to be held in China, the U.S., or third-party countries. This institutional framework reflects a notable shift from ad-hoc trade fights to structured, ongoing economic diplomacy.
Trade Representative Jamieson Greer, speaking in Geneva, recalled that China was originally hit with a 34% reciprocal tariff rate. It was, he emphasized, the only country that retaliated with its own sweeping tariffs. “All other countries withheld and decided they wanted to negotiate,” Greer noted, highlighting how China’s reaction had uniquely escalated tensions.
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To counter that retaliation, the Trump administration ramped up tariff rates dramatically, resulting in a spiraling trade war that saw combined tariff increases exceed 125% on key goods.
This 90-day cooling period appears to be an attempt to test whether either side is willing to convert mutual pain into lasting policy reform.
