Tariff Truce: US and China Agrees To Cut Reciprocal Tariffs For 90 Days After Lake Geneva Talks

In a major development signalling a thaw in trade tensions, the United States and China have agreed to suspend most tariffs on each other’s goods. The agreement marks a significant step forward in trade relations between the world’s two largest economies, according to a Reuters report.

As part of the deal, “reciprocal” tariffs between both countries will be reduced from 125% to just 10%. However, the US will continue to impose 20% duties on Chinese imports related to fentanyl, which means the total tariff burden on Chinese goods will now stand at 30%.

The breakthrough came after high-stakes trade talks were held over the weekend in Lake Geneva, Switzerland. Officials from both sides described the discussions as productive and constructive.

“We had very productive talks and I believe that the venue, here in Lake Geneva, added great equanimity to what was a very positive process,” said US Treasury Secretary Scott Bessent.

“We have reached an agreement on a 90-day pause and substantially move down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115%,” he added.

Both countries confirmed that they will continue discussions on broader economic and trade policies over the coming months.

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US-China Tariff Truce

Since returning to the office in January, President Trump raised tariffs on Chinese imports to 145%, building on the already high duties from his previous term and those maintained by the Biden administration. 

In response, China hit back with 125% tariffs on U.S. goods and placed export restrictions on rare earth materials, which are critical for the US defence and tech industries.

This prolonged trade war has stalled nearly $600 billion in trade between the two nations, disrupted supply chains, and led to economic concerns such as stagflation and job losses.

However, the Geneva meetings, which were described as productive by both parties, have boosted investor sentiment. 

Following the talks, Wall Street stock futures rose and the U.S. dollar strengthened against traditional safe-haven currencies.