The United States and China announced on Monday the suspension for an initial period of 90 days of a substantial portion of the tariffs applied to each other, after talks held between the two superpowers in Switzerland over the weekend to resolve their trade differences.
In this way, as of May 14 and during an initial period of 90 days, the United States will suspend the reciprocal tariffs implemented by Donald Trump on imports from China, which will now be taxed at 30% from the current 145%, while China will reduce the tariffs on imports from the US to 10%, down from the current 125%.
How was the agreement reached between the United States and China?
“This agreement is really about the reciprocal tariff imposed by the United States on April 2 and the escalation measures that followed,” explained US Trade Representative Jamieson Greer at a press conference, one of the officials involved in the weekend negotiations.
“All of that has been reduced from 115% to 10% each,” he pointed out, adding that, on the other hand, the United States imposed a 20% tariff on fentanyl at the beginning of the year, so it will be in effect at 30%."
“What matters for the agreement today is that each of us has agreed to reduce reciprocal tariffs and related retaliations to 10%. That is, reducing from 115% to 10%. Fentanyl is going its own way, but in a very positive direction, as we are having a very constructive conversation with our Chinese counterparts,” Greer emphasized.
Likewise, Washington and Beijing announced in a joint statement that they will establish a mechanism to continue the conversations on economic and trade relations between the two countries.
The representative of China for these talks will be He Lifeng, Vice Premier of the State Council, and the representatives of the United States will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer.
These meetings may be held alternatively in China and the United States, or in a third country, subject to agreement by both parties.
The United States and China have recognized the importance of the bilateral economic and trade relationship for both countries and for the global economy, as well as the importance of a “sustainable, lasting, and mutually beneficial” economic and trade relationship.
“We want to trade. We want a more balanced trade. And I believe that both parties are committed to achieving it,” said the US Treasury Secretary, Scott Bessent, in a press conference in Geneva, reiterating the desire for China to open up to more American products.
Markets react with euphoria
The main stock market indices in the United States started this Monday’s session with strong gains, following the tariff agreement with China, allowing the Dow Jones and Nasdaq to surpass the levels prior to the closing of April 2nd, when Donald Trump announced the widespread tariff increase on what he called “Liberation Day.”
The Dow Jones index rose by 2.65% after the closing bell to reach 42,345 points, while the Nasdaq climbed over 4% and traded at 18,674 points, and the S&P 500 rose by 2.98% to reach 5,829 points, all of them above the levels recorded at the close of the session on April 2nd.