Geneva, Switzerland – May 6, 2025 – In a significant step toward easing trade tensions, the United States and China have reached an agreement to dramatically reduce tariffs on each other’s goods for an initial 90-day period. The move marks a major breakthrough in the long-standing trade dispute that has rattled global markets and strained relations between the world’s two largest economies.
The announcement was made Monday in a joint statement following a weekend of intense negotiations in Geneva. Both countries described the talks as having achieved “substantial progress,” with a mutual commitment to fostering a more sustainable and balanced economic relationship.
As part of the agreement, the U.S. will reduce tariffs on Chinese imports from 145% to 30% by *May 14, while China will slash its tariffs on American goods from **125% to 10%. The temporary reduction is expected to last for *90 days, during which further discussions on trade cooperation will take place.
“Both sides recognize the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” the joint statement emphasized.
New Trade Dialogue Mechanism Established
The agreement also includes the creation of a bilateral mechanism to oversee ongoing trade discussions. The group will be co-led by *Chinese Vice Premier He Lifeng, **U.S. Treasury Secretary Scott Bessent, and *U.S. Trade Representative Jamieson Greer.
Meetings will alternate between China, the United States, or a third-party country, depending on mutual agreement. Additionally, both sides may convene working-level consultations on specific trade and economic matters as needed.
Markets React Positively
News of the deal sent *global financial markets soaring. U.S. stock futures rallied during Asian trading hours, with **Dow futures jumping over 2%, the **S\&P 500 rising nearly 3%, and *Nasdaq Composite futures surging more than 3.5%.
Asian markets responded similarly, with Hong Kong’s Hang Seng Index climbing over 3%, reflecting investor optimism that the easing of trade tensions could help stabilize the global economy.
A Turning Point in a Prolonged Trade War
The breakthrough represents a dramatic shift in a trade war that began under former President Donald Trump, who imposed sweeping tariffs on Chinese goods. The escalating tariffs have disrupted global supply chains, inflamed inflation, and contributed to fears of a global economic slowdown.
With both nations now signaling a desire for compromise and dialogue, analysts say the agreement could mark the beginning of a broader shift toward economic cooperation rather than conflict.
More detailed negotiations are expected in the coming weeks as both countries work to define longer-term solutions to ongoing trade disputes.
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