Potentially providing some relief from economic stresses at least in the near term, the U.S. and China have agreed to a 90-day reduction in the aggressive tariffs mutually imposed by the two countries in recent weeks.
The administration of U.S. President Donald Trump imposed 145-percent tariffs on Chinese imports, leading to a 125-percent retaliatory tariff on American goods by China, Reuters reports.
U.S.-market Buick Envision imported from China
However, at negotiations carried out at a lakeside villa in Geneva, Switzerland between U.S. and Chinese officials, both nations backed away from the punitive duties and agreed to much more modest tariffs on one another’s imports. On the American side, the tariffs will be reduced to 30 percent, while the Chinese will levy just 10 percent on U.S. imports.
The current agreement will last for roughly three months. Scott Bessent, U.S. Treasury Secretary, remarked that “both countries represented their national interest very well,” adding “we both have an interest in balanced trade, the U.S. will continue moving towards that.” A Hong Kong economist, Zhiwei Zhang, said the tariff deal was better than the 50 percent duties he predicted.
Logo Of The Durant Guild, GM’s premium imported vehicle platform in China
The U.S. stock market rose on the news as $600 billion in trade goods will now start flowing between the countries again. Scott Bessent pointed out that the 145-percent and 125-percent duties were “the equivalent of an embargo,” but also said “we do want trade.” European stocks also rose on the news.
The new tariffs may still be fine-tuned in certain areas. The Chinese government may resume exports of rare earth minerals needed for American technology, including advanced weapons. The U.S., for its part, is particularly interested in the steel and semiconductor sectors.
Chinese-market GMC Yukon
The news follows the Trump administration’s negotiation of a trade deal with the United Kingdom that saw automotive tariffs on British vehicles cut from 27.5 percent to 10 percent among other reductions.
Regarding the drastic 90-day reduction in mutual tariffs between the U.S. and China, President Trump himself remarked that the results represented “a total reset… in a friendly, but constructive, manner.”
