Markets around the world reacted positively to the announcement, with the U.S. dollar strengthening and the yield on U.S. Treasuries rising.
The United States and China said on May 12 they have agreed to a deal to slash reciprocal tariffs for 90 days.
Speaking after talks with officials from the Chinese communist regime in Geneva, U.S. Treasury Secretary Scott Bessent told reporters that the two sides had agreed on a 90 day pause on measures and that they will move their tariffs down.
Both economies have sought to end a trade war in which last month the United States slapped Beijing with a 145 percent tariff on Chinese goods, while the Chinese Communist Party hiked 125 percent levies on U.S. imports in retaliation.
“Both countries represented their national interest very well,” Bessent said.
“We both have an interest in balanced trade, the U.S. will continue moving towards that.”
Trade Representative Jamieson Greer said that the U.S.’s reciprocal tariff rate will go down to 30 percent, “so it goes down 115 percent.”
“And the Chinese on their side also go down 115 percent to 10 percent, and they remove the countermeasures that they have in place,” he added.
One reason President Donald Trump imposed tariffs on China (as well as Mexico and Canada) was that he said the Chinese regime has failed to take the necessary steps to curb the flow of the deadly drug fentanyl.
Trump also said the levies are a response to China’s “intellectual property theft, forced technology transfer, and other unreasonable behavior.”
Other measures the United States has put in place previously, whether that is tariff measures from 2018 or tariffs under other statutory authorities, those remain unchanged for now, Greer said.
“The Chinese and the United States agreed to work constructively together on fentanyl,” he added.
The White House said that both countries have committed to take the following actions by May 14.
In a statement China’s Ministry of Commerce said the high tariffs have “severely damaged normal bilateral trade and disrupted the international economic and trade order.”
By Owen Evans
