The U.S. and China have agreed to temporarily lower tariffs on each other’s products in a bid to ease trade tensions and create space for further negotiations over the next three months.
According to Bloomberg, under the new arrangement, U.S. tariffs on Chinese goods will fall from a combined 145% to 30% by May 14. In return, China will reduce its duties on U.S. products from 125% to 10%. Treasury Secretary Scott Bessent emphasized that the two nations do not intend to decouple economically and signaled progress on fentanyl-related talks and possible future purchasing agreements by China.
However, this reduction does not affect sector-wide tariffs applied to all U.S. trading partners or the initial tariffs imposed on China during the Trump administration, which remain intact.
Financial markets responded positively to the news, with global stocks, oil prices, and the dollar all rising. The yuan also gained ground against the dollar. Both countries agreed to set up a mechanism to continue trade discussions.
China reiterated its desire for stable relations with the U.S., stressing mutual respect and rejecting pressure tactics. While this development is seen as a step toward resolving a long-standing trade conflict, history shows that such negotiations can be slow and uncertain.
