The US and China have agreed to ease tariffs for 90 days starting May 14.
In a surprising shift that caught markets off guard, China and the United States have agreed to ease tariffs on each other’s products for a trial period of 90 days. The temporary relief is seen as a bold step to calm years of trade tension between the two global giants.
Talks in Geneva Lead to New Economic Path
The agreement came after intense back-to-back meetings in Geneva, where top officials from both countries sat for several days of negotiation. In a joint statement released Monday night, both nations said they had made strong progress and promised to keep working toward a steady and fair trade partnership.
Tariffs to Drop Sharply on Both Sides
According to the new terms, starting May 14, the US will lower its duties on Chinese imports from 145% to 30%. In return, China will cut its tariffs on American goods from 125% to just 10%, offering a major break for businesses on both ends.
New Communication Channel Launched
The deal also includes a system to keep both sides talking. A high-level trade dialogue will now be led by China’s Vice Premier He Lifeng, along with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. The location of meetings will vary between the two nations or even a neutral country.
Markets React with Strong Confidence
Global markets welcomed the deal with open arms. US futures went up sharply—Dow rose by over 2%, S&P 500 nearly 3%, and the Nasdaq shot up more than 3.5%. Meanwhile, Hong Kong’s Hang Seng Index also jumped more than 3%, reflecting growing confidence from investors.
Trade War’s Biggest Breakthrough Yet
This agreement is the biggest breakthrough in the long-running trade standoff that began when then-President Donald Trump raised tariffs, sparking a cycle of retaliation. That conflict had caused delays in global supply chains and raised fears of an economic slowdown worldwide.
Challenges Remain But Hope is Rising
Experts warn that despite this progress, several key issues remain unresolved. Still, the 90-day agreement is being seen as a hopeful moment in a tense global environment, bringing optimism that a more permanent solution may eventually be reached.
