US and China agree temporary tariff slash

What Happened

The United States and China have agreed to a temporary reduction in the tariffs they impose on each other’s imports, marking a significant—if short-term—easing in trade tensions between the two economic powers.

Following trade talks held in Switzerland over the weekend, both sides confirmed they would cut their respective tariffs by 115% for a period of 90 days. US Treasury Secretary Scott Bessent described the discussions as “productive and constructive”.

This marks the first formal meeting between the two nations since US President Donald Trump imposed aggressive tariffs on Chinese goods entering the American market earlier this year. The US had raised tariffs to 145%, prompting China to retaliate with a 125% levy on selected American products.

These steep tariff hikes rattled financial markets and fuelled fears of a potential global recession.

What Next

Under the new agreement, the US will reduce its tariffs on Chinese imports to 30% for the next 90 days. In return, China will lower its tariffs on American goods to 10% over the same period.

While this is being seen as a welcome de-escalation, the tariff cuts are only temporary. It remains unclear whether further progress will be made once the 90-day period ends.

Both governments are expected to resume negotiations in the coming weeks, with the global business community watching closely for signs of a more permanent resolution.

Media Reactions

Politico reports Trump said the two biggest economies in the world have achieved a “total reset” after weeks of mounting tensions. “We want to see, for the good of both China and the U.S., an opening up of China to American business,” Trump wrote on Truth Social early Sunday. “Great progress made,” he added.

Reuters reports that European shares rose on Monday, as investors welcomed signs of progress in U.S.-China trade talks aimed at cooling a trade war between the world’s two largest economies and dispelling some of the uncertainty clouding financial markets.#

Bloomberg reports global stocks have claimed after the announcement to cut tariffs for 90 days that will see Beijing cut tariffs on US goods to 10% (from 125%) and Washington reduce duties on Chinese goods to 30% (from 145%). The announcement has sent the US dollar rally to one-month highs against the Euro and Yen.

CNN says the US and China agreed to “drastically roll back tariffs” on Monday for a 90-day period, in “a surprise breakthrough that has buoyed global markets.”