The United States and China have announced that they have reached a deal to reduce reciprocal tariffs temporarily, as the world’s two largest economies work to resolve a trade war that has unsettled the global economic outlook and rattled financial markets.

Speaking after discussions with Chinese officials in Geneva, US Treasury Secretary Scott Bessent told reporters that the two nations had agreed on a 90-day pause on tariff measures, with tariffs set to drop by over 100 percentage points to 10%.

“Both countries represented their national interests very well,” Bessent stated. “We both have an interest in balanced trade, and the US will continue moving towards that.”

Following the announcement, the dollar strengthened against major currencies, and financial markets rallied, easing concerns of a potential economic downturn triggered last month when US President Donald Trump intensified tariff measures aimed at reducing the US trade deficit.

Bessent addressed the media alongside US Trade Representative Jamieson Greer after the weekend talks in Switzerland, where both sides noted progress in narrowing their differences. “The consensus from both delegations this weekend is that neither side wants a decoupling,” Bessent said. “The previous high tariffs amounted to an embargo, and neither side desires that. We want trade.”

The Geneva discussions marked the first direct engagement between senior US and Chinese economic officials since Trump returned to office and initiated a global tariff campaign, particularly targeting China.

Since taking office in January, Trump had increased tariffs on Chinese imports to 145%, adding to the levies introduced during his first term and those imposed by the Biden administration. In response, China introduced export restrictions on key rare earth elements vital for US manufacturers of weapons and electronics, while also raising tariffs on US goods to 125%.

Source: Arisetv