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U.S. and Chinese officials announced Monday that they have agreed to significantly reduce tariffs and implement a 90-day pause in their ongoing trade dispute to allow for continued negotiations.
The move, seen as a step toward easing tensions between the world’s two largest economies, sent global markets soaring. Investors welcomed the development after months of economic uncertainty caused by escalating tariffs and stalled talks.
“The consensus from both delegations this weekend is neither side wants a decoupling,” Treasury Secretary Scott Bessent said.
“And what had occurred with these very high tariff … was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade. We want more balanced trade. And I think that both sides are committed to achieving that,” he added.
Trade Representative Jamieson Greer said the U.S. would reduce its 145 percent tariff on Chinese imports by 115 percentage points, bringing it down to 30 percent. In return, China will lower its tariffs on American goods to 10 percent, matching the reduction that the United States has made.
Both Greer and Bessent struck an optimistic tone, noting that the two nations had agreed to continue consultations aimed at resolving key trade issues.
Speaking after two days of discussions, Bessent warned that maintaining such high tariffs would have effectively shut down trade between the two nations, something neither government wants.
China’s Ministry of Commerce echoed that sentiment, calling the agreement a significant step toward resolving long-standing disagreements. The ministry noted that the deal would benefit consumers and businesses in both countries and contribute to global economic stability.
“This initiative aligns with the expectations of producers and consumers in both countries and serves the interests of both nations as well as the common interests of the world,” the ministry said, according to The Associated Press. It added that China hopes the U.S. will end “the erroneous practice of unilateral tariff hikes” and work with Beijing to strengthen economic ties.
The broader effects of the agreement remain to be seen, particularly since the truce is limited to 90 days and deep divisions persist. Still, markets responded with enthusiasm.