The US and China agree to a transaction that lowers tariff levels
The US and China agreed to a trade agreement after face-to-face meetings with senior economic officials.
WASHINGTON – The Trump administration and China have agreed to cut tariffs over the next 90 days with a push to eliminate the trade war between the two biggest economies in the world.
President Donald Trump’s instantaneous hideout has defended sudden tariffs on Chinese imports as important to rejuvenate U.S. domestic manufacturing, despite the movement rattles the economic unrest among Americans that thrusts global markets and economic unrest.
Trump promoted the deal from the White House Roosevelt Room on May 12 after his best economic staff fell into consensus after two days of negotiations in Geneva with his Chinese counterpart.
“We achieved a complete reset with China after productive talks in Geneva,” Trump said. “The biggest part of the transaction was that we opened China. China agreed to open it to American businesses.”
Here’s what we know about the contract:
US tariffs on China have dropped to 30%
Under the contract, the US will reduce the 125% mutual tariffs imposed on Chinese imports by 110% for 90 days, to a baseline tariff of 10%, consistent with the tariffs imposed by the Trump administration on other countries.
Trump’s 20% tariff slapped in China over fentanyl production. In other words, US tariffs on China are totaling 30%.
“We’re not trying to hurt China. China was very badly hurt,” Trump said. “They had closed the factory. They had a lot of anxiety and were very happy to be able to do something with us.”
Trump said that if China does not agree to the final resolution in 90 days, he will raise tariffs again, but will not return to 145%.
“No,” Trump said when asked if the fee would return to 145%. “But they’ll rise significantly.”
China cuts tariffs on US exports and agrees to other trade measures
Next, the Chinese government agreed to reduce retaliatory tariffs on US exports from 125% to 10% for 90 days.
Trump said Chinese leaders also agreed to remove or suspend various non-tariff measures that China opposes the US and cut off the flow of fentanyl to the US.
“While both sides were well expressed in their national interests, we shared interest and concluded that neither side was interested in decoupling,” said Scott Bescent, Treasury, who discussed the deal with a Geneva reporter along with US trade representative Jamieson Greer.
This transaction does not apply to the universal 25% tariffs Trump has imposed on cars, auto parts, steel and aluminum.
Both countries are scheduled to reduce tariffs by May 14th.
US stock markets surge after tariffs suspend
The US stock market surged in news of a 90-day suspension, with the Dow Jones industrial average rising over 1,000 points to 2.5%.
The S&P 500 and the high-tech NASDAQ also featured a large collection.
For weeks, the stock market was a seesaw amid Trump’s on and off duty regime.
US-China negotiations continue
Bescent has made it clear that talks between the Trump administration and China will continue as the US is trying to end China’s trade imbalance. He said both sides have a better foundation following the 90-day suspension.
“We’re looking forward to a very good discussion as the mechanism created in Geneva was created this weekend,” Bescent said.
Trump cuts tariffs far greater than he proposed
Heading into two days of negotiations, Trump expressed his willingness to lower tariffs in China to 80% rates. However, Trump’s agreement reached with China will be significantly reduced.
“It’s all about negotiations,” Greer said when asked about the major tariff cuts. “And we have come to this very good thing for the US and very good for China as a result.”
Bescent says both sides have promised a more “balanced trade.”
Massive tariffs from both countries effectively halted $600 billion in annual trade between them.
Trump has picked out China. It exported goods to the United States nearly $300 billion more than imports, as the top criminal of the US trade deficit, as well as the top criminal of the US trade deficit.
“We want a more balanced trade and I think both sides are committed to achieving that. We want China to open for more US products,” Bessent said, adding that a purchase agreement from China for certain US products could be negotiated.
Reach Joey Garrison with X @joeygarrison.
