[Published: Monday May 12 2025]
 US and China Agree to Temporarily Slash Tariffs in Bid to Defuse Trade War
WASHINGTON/BEIJING, 12 May. - (ANA) - The United States and China said Monday they reached an agreement to temporarily reduce the punishing tariffs they have imposed on each other while they try to defuse the trade war threatening the world’s two largest economies.
In a joint statement, the countries said they would suspend their respective tariffs for 90 days and continue negotiations they started this weekend. Under the agreement, the United States would reduce the tariff on Chinese imports to 30 percent from its current 145 percent, while China would lower its import duty on American goods to 10 percent from 125 percent.
“We concluded that we have a shared interest,” said Treasury Secretary Scott Bessent at a news conference in Geneva where U.S. and Chinese officials met over the weekend. “The consensus from both delegations is that neither side wanted a decoupling,” he said.
Details of the truce
Under the truce, U.S. tariffs on Chinese goods will fall from 145% to 30%, while China will cut duties on American goods from 125% to 10%, both for an initial 90-day window. The rollback is far more aggressive than many expected and signals what negotiators described as “substantial progress” toward a longer-term resolution.
For markets, it’s a welcome reprieve from geopolitical brinkmanship. As Monday’s futures made clear, the deal is functioning as a pressure release for investor fears, not to mention a global supply chain that’s been creaking and grinding under the strain.
The sharp rally in major indexes further reflected that pivot, with the Nasdaq leading the charge and tech stocks in particular poised to benefit from easing supply chain constraints.
‘A huge win for the market and bulls’
Wedbush analysts called the deal a “huge win for the market and bulls,” noting that the cuts likely take a near-term U.S. recession “off the table.” Analysts at the firm now expect the focus to shift from the economic doom-and-gloom of the past six weeks toward a more normalized growth outlook. Other analysts questioned the point of all the upheaval. - (ANA) -
AB/ANA/12 May 2025 - - -
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