After intense negotiations in Geneva, the United States and China have agreed to a significant rollback and temporary suspension of tariffs, marking a crucial step towards de-escalating a trade war that has unsettled global markets and disrupted supply chains.
The deal, announced on Monday, will see the US reduce its tariff rate on Chinese goods from 145 per cent to 30 per cent, while China will cut its tariffs on US imports from 125 per cent to 10 per cent for a period of 90 days.
The agreement emerged after two days of “productive” and “robust” talks between US treasury secretary Scott Bessent and Chinese vice-premier He Lifeng, alongside their respective trade representatives.
Both sides pledged to remove 91 percentage points of the tariffs imposed since early April and suspend a further 24 percentage points for the next three months. However, some tariffs, such as the 20 per cent duties imposed by the US to curb fentanyl imports, will remain in place.
A new mechanism for ongoing economic and trade consultations has been established to continue dialogue beyond this initial suspension, signalling a willingness to work through structural issues that have long plagued bilateral trade relations.
This tariff rollback is a major de-escalation in a trade conflict that had raised fears of a global economic downturn. The tit-for-tat tariffs, which had reached unprecedented levels, disrupted global supply chains, increased costs for businesses, and injected uncertainty into international markets. The deal is expected to ease inflationary pressures, revive cross-border trade, and boost investor confidence worldwide.