The United States and China have reached an agreement to temporarily reduce tariffs, marking a significant step towards easing the trade war between the world’s two largest economies. In a joint statement, both countries announced they would suspend their respective tariffs for 90 days and continue negotiations that began over the weekend. The United States agreed to lower tariffs on Chinese imports from 145 percent to 30 percent, while China will reduce its import duty on American goods from 125 percent to 10 percent.
President Donald Trump, who had previously declared he would not lower tariffs without concessions from China, acknowledged the steep costs of an all-out trade war. Despite the White House’s earlier stance, the Trump administration backed off, for now, from the most severe tariffs and agreed to hold formal talks with Beijing. Trump explained that many tariffs he imposed remain in place and mentioned an expected call with Chinese President Xi Jinping this week.
Temporary tariff reductions agreed upon
He noted that finalizing a comprehensive deal would take some time. “We’re not looking to hurt China,” Trump stated.
The outcome of these urgent negotiations brings tariff rates closer to where they were before President Trump escalated them on April 2, a day he termed “Liberation Day.” However, beyond an agreement to continue discussions, the talks did not seem to result in any significant concessions. Investors reacted positively to the news, with the S&P 500 index leaping more than 3.2 percent, the Dow rising by 2.8 percent, and the Nasdaq surging by 4.3 percent by the end of the day. The gains largely offset previous losses incurred after the initial tariffs announcement in April.
As both nations prepare for further negotiations, the temporary tariff reductions offer a window to ease some economic tensions while seeking a more permanent resolution. The global economic community watches closely, hoping for a more stable and cooperative trade relationship between the two giants.
