The United States and China have agreed to a temporary cut in tariffs that they had imposed earlier on each other’s imports. With this, Washington and Beijing seek to end a trade war that has disrupted the global economy and set financial markets on edge.
The US will cut tariffs on China to 30 per cent from the earlier 145 per cent for 90 days and China will lower tariffs on US goods to 10 per cent for 90 days. US Treasury Secretary Scott Bessent said that the two sides had agreed on a 90 day pause on measures and that tariffs would come down by over 100 percentage points to 10 per cent.
Speaking after talks with Chinese officials in Geneva, Scott Bessent said in a presser, “We had very productive talks. We have reached an agreement on a 90 day pause and substantially moved down the tariff levels on both sides on the reciprocal tariffs, moving it down by 115 per cent. We had very positive discussions and both sides showed great respect.”
He further added, “Both countries represented their national interests very well. We concluded that we have shared interests and we both have an interest in balanced trade. The US will continue moving towards that.”
Scott Bessent also put hopes on strategies that could balance its trade deficit with China. “We would like to see China more open to US goods and we expect that as the negotiations proceed, there will also be the possibility of a purchase agreement to pull what is our largest bilateral trade deficit into balance that has been out of balance,” he said.
Bessent was speaking alongside the US Trade Representative Jamieson Greer after the weekend talks in which both sides had hailed progress on narrowing differences.
The meetings in Geneva were the first face-to-face interactions between senior US and Chinese economic officials since the US President Donald Trump returned to power and announced a series of tariffs on its trading partners, imposing particularly hefty duties on China.
Since January, Trump has hiked the tariffs paid by US importers for goods from China to 145 per cent in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration. China too had reciprocated by raising tariffs on US goods to 125 per cent.