US and China Agree to 90-Day Trade Truce in Bid to De-Escalate Economic Tensions
Geneva, May 12, 2025 — The United States and China have reached a landmark agreement to pause their intensifying trade war, agreeing to a 90-day truce that includes significant tariff reductions and a renewed commitment to dialogue.
Following tense negotiations in Geneva, both sides confirmed a temporary rollback of the steep tariffs that have strained global supply chains and triggered market volatility. The agreement marks a rare moment of cooperation between the world’s two largest economies amid escalating geopolitical tensions.
Key Elements of the Deal:
- The United States will reduce its tariffs on Chinese imports from a peak rate of 145% down to 30%.
- China will cut its tariffs on American goods from 125% to 10%.
- A 20% tariff on Chinese goods linked to the US’s accusations over China’s role in the fentanyl crisis will remain in place.
- Both nations pledged to resume regular economic dialogue and avoid any further escalation during the 90-day period.
The deal was reached against the backdrop of mounting economic pressure, with both countries experiencing the side effects of their tit-for-tat tariff war. Business leaders and financial markets responded positively to the news, with China’s yuan rising to a six-month high and European stock indices climbing amid renewed investor confidence.
Energy and commodity markets also reacted swiftly. Prices for crude oil and iron ore surged, reflecting optimism over improved global trade flows.
In Beijing, Chinese officials hailed the agreement as a constructive step forward, while cautioning that deeper disagreements over industrial policy, technology access, and intellectual property rights remain unresolved.
US officials echoed a similarly cautious optimism, with the White House describing the deal as a “strategic pause” rather than a full resolution. Former President Donald Trump’s previous administration was known for aggressive tariffs on Chinese goods, many of which are now being re-evaluated under current leadership.
The truce offers a vital window for both nations to address their long-standing disputes and potentially lay the groundwork for a more stable and balanced trading relationship. Whether the pause leads to lasting peace or merely delays further confrontation will depend on the outcome of the next round of negotiations.
