U.S. to slash reciprocal tariffs on China by 115%

The United States has decided to temporarily cut reciprocal tariffs on China by 115% as part of an agreement between the two countries during trade talks in Geneva.

Both countries said they will reduce reciprocal tariffs by 115%. This brings down tariffs on Chinese goods to the US to 30% from 145% earlier, while China will levy a 10% tariff on US goods compared to the 125% previously.

A joint statement about the agreement states that the 90-day suspension will commence on May 14.

The deal puts an end to the ongoing trade war between the two largest economies in the world. The Geneva meetings marked the first in-person discussions between high-level U.S. and Chinese economic officials since President Donald Trump resumed office and initiated a worldwide tariff war, with especially steep levies targeting China. Since his inauguration in January, Trump has raised the tariffs that American importers must pay on Chinese goods to 145%.

"Both countries represented their national interest very well," U.S. Treasury Secretary Scott Bessent told reporters. "We both have an interest in balanced trade, the U.S. will continue moving towards that."

The White House in a statement said the trade talks recognise the importance of bilateral economic and trade relationship to both countries and the global economy and the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship.

The tariff war effectively led to a de facto “trade embargo” between the two countries. Both nations will now create a framework to maintain dialogue on economic and trade matters. US Secretary of the Treasury Scott Bessent will act as the U.S. representative, while Vice Premier He Lifeng will represent China. Future discussions could take place in the United States, China, or a mutually agreed third country.

On Sunday, Bessent said the trade talks held in Geneva were productive, but did not give any details. “I’m happy to report that we made substantial progress between the United States and China in the very important trade talks… I can tell you that the talks were productive,” Bessent said.

In 2024, the United States' total goods trade with China was around $582.4 billion, according to the Office of the U.S. Trade Representative. U.S. exports of goods to China amounted to $143.5 billion, representing a 2.9% decrease ($4.2 billion) compared to 2023. Meanwhile, the value of imported goods from China touched $438.9 billion, marking a 2.8% increase ($12.1 billion) from the previous year. As a result, the U.S. goods trade deficit with China rose to $295.4 billion in 2024, up 5.8% ($16.3 billion) from 2023.