U.S. and China agree to 90-day tariff truce

In a major step toward easing tensions between the world’s two largest economies, the United States and China have agreed to a temporary reduction in reciprocal tariffs, potentially marking a turning point in the bruising trade war that has gripped global markets for nearly two years.

Treasury Secretary Scott Bessent announced Monday that both nations will significantly lower tariffs on each other’s goods for a 90-day period, beginning Wednesday. The U.S. will reduce its tariff on Chinese imports from a punitive 145% to 30%, while China will lower its tariff on U.S. goods from 125% to 10%.

“Both countries represented their national interest very well,” Bessent said after high-level talks with Chinese trade officials in Geneva. “This is not surrender or retreat by either side—it’s a recognition that the economic costs of escalation were becoming too high for both nations and the world economy.”

The move comes after months of tit-for-tat tariff hikes that stifled trade, strained diplomatic ties, and fueled fears of a global recession. According to officials, the tariff reductions are intended to create breathing room for further negotiations aimed at resolving deeper issues, including intellectual property enforcement, market access, and industrial subsidies.

In a rare display of unity, the White House and China’s Ministry of Commerce issued a joint statement emphasizing the agreement was reached in the “spirit of mutual opening, continued communication, cooperation, and mutual respect.”

The agreement also includes a suspension or cancellation of several Chinese non-tariff retaliatory measures, such as export restrictions and the blacklisting of U.S. companies—steps that had further roiled American industries from tech to agriculture.

Jamieson Greer, the U.S. Trade Representative, expressed optimism: “The speed at which we came to this agreement shows the differences may not be as irreconcilable as previously believed. It’s a sign that diplomacy can still work, even in tense times.”

Chinese counterpart Li Chenggang offered a more poetic take: “As we say in China, if the dishes are delicious, then timing is not a matter. This is good news for both our people and the world.”

The trade war was initially sparked by former tariff hikes imposed by President Donald Trump, who cited China’s failure to curb the flow of fentanyl into the U.S. and alleged unfair trade practices. Tariffs began at 20% but quickly escalated, reaching historic highs last year after a series of retaliatory moves by both sides.

Trump later justified the increases by accusing China of showing a “lack of respect” toward global markets. However, a wave of market volatility and diplomatic pressure—including outreach from over 75 countries—led the administration to signal a willingness to negotiate.

The 90-day reduction in tariffs follows a similar temporary easing of measures announced by Trump last month, which did not initially include China. That move, driven by investor panic and Wall Street volatility, was intended to calm markets and give breathing room for trade diplomacy.

Trump commented at the time, “People were getting a little bit yippee. A little bit afraid. So I made the move.”

This week’s development also comes on the heels of a major new trade deal between the United States and the United Kingdom. That agreement includes billions in market access for U.S. agricultural exports and relaxed tariffs on U.K. manufactured goods and steel. British plane parts and Rolls Royce engines will now enter the U.S. duty-free, while the U.K. has committed to purchasing $10 billion in Boeing aircraft.

While the 90-day tariff reduction between the U.S. and China is temporary, both sides have agreed to remain at the negotiating table. Analysts warn that without structural reform and enforceable agreements, the pause could simply delay another round of confrontation.

Still, for now, the ceasefire offers relief to companies, investors, and consumers who have felt the squeeze of rising costs and economic uncertainty.

“Many other deals, which are in serious stages of negotiation, to follow!” Trump said on social media, hinting that his administration is looking to expand its trade agenda further in the months ahead.