U.S. and China Reach Surprise Deal to Slash Tariffs, Calming Global Markets
In a major breakthrough aimed at easing trade tensions, the United States and China have reached an unexpected agreement to temporarily slash reciprocal tariffs, lifting global markets and boosting the dollar, The Gaze reports, citing Reuters.
The deal was announced after talks in Switzerland, where top U.S. and Chinese officials met face-to-face for the first time since President Donald Trump returned to power and intensified the trade war.
According to the agreement:
• U.S. tariffs on Chinese imports imposed in April will be reduced from 145% to 30%.
• Chinese tariffs on U.S. goods will drop from 125% to 10%.
The tariff reductions are temporary and will remain in effect for 90 days.
Markets reacted positively. The U.S. dollar rose against major currencies, and stock markets gained, calming fears of a global recession triggered by last month’s trade escalations.
“Both countries represented their national interest very well,” said U.S. Treasury Secretary Scott Bessent, following the Geneva talks. “We both have an interest in balanced trade, the U.S. will continue moving towards that.”
Speaking alongside U.S. Trade Representative Jamieson Greer, Bessent emphasized the shared desire to avoid further economic damage.
“The consensus from both delegations this weekend is neither side wants a decoupling. And what had occurred with these very high tariffs … was the equivalent of an embargo, and neither side wants that. We do want trade.”
The discussions focused on overall tariff levels and did not include sector-specific terms, but Bessent noted the U.S. would continue efforts to rebalance strategically important industries like medicines, semiconductors, and steel.
Since Trump returned to office in January, his administration had raised tariffs on Chinese imports to a historic 145%, intensifying duties from both his first term and those imposed under the Biden administration.
In response, China raised its own tariffs and placed export restrictions on rare earth elements, vital for the U.S. defense and tech sectors.
As The Gaze previously reported, European Commission President Ursula von der Leyen has said that countries are ‘lining up’ to trade with the EU after President Donald Trump imposed higher tariffs on US imports.