Trade Turnaround: US-China Tariff Reduction and Revitalized Trade Talks
United States and China reach tariff reduction agreement, momentarily alleviating trade conflict.
In a surprising development, the United States and China have reached an agreement to drastically scale back the tariffs on each other's goods, just weeks after implementing these sanctions. This breakthrough follows negotiations held over the weekend in Switzerland between top representatives from both nations. This dramatic shift sparks hope for the global economy that has recently grappled with the fallout from these escalating trade disputes.
The US tariffs on Chinese goods will plummet from a minimum of 145% to a base tariff of 30% for an initial 90-day period. In turn, China will lower its tariffs from a minimum of 125% to 10% on US goods[1][2]. The negotiations were overseen by Vice Premier He Lifeng for China and Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent for the US.
"We've found common ground," stated Bessent at a Monday press conference. "We both have a vested interest in balanced trade." According to Greer, both countries are optimistic about working together to address the fentanyl trafficking issue[3].
The newUS tariffs represent a base rate of 10% that remains on all imports, in addition to the initial 20% tariff President Trump imposed earlier this year. These additional tariffs were implemented as punitive measures against China, amid accusations of fentanyl-related chemicals being produced in China[3].
Both delegations commended each other following the negotiations. Vice Premier He described the meeting as "candid, in-depth, and constructive," noting significant progress and reaching important consensus[4]. Greer affirmed China's proactive approach during the negotiations, emphasizing the rapid progress made between the two nations[4].
The preposterously high tariff rates, introduced over the course of April and met with retaliatory measures from both sides, had effectively crippled trade between the world's two largest economies. The sudden price surge left many US consumers and small businesses struggling to meet orders from China[4]. Although the tariff cut offers some respite for importers, it remains tentative, and these reductions could be rescinded if the relationship between the two countries sours again[4].
Jens Eskelund, president of the European Union Chamber of Commerce in China, emphasized the lingering uncertainty faced by businesses, stating, "Companies require certainty to maintain business as usual and make informed investment decisions."
The US is currently negotiating with China to increase American goods imports, echoing a trade agreement negotiated with China in 2020. However, China failed to purchase the additional $200 billion in goods that the US anticipated[5]. Future discussions will take place in China, the US, or a third country as agreed upon by both nations[5].
As Dmitry Grozoubinski, executive director of Geneva Trade Platform and a former Australian diplomat and trade negotiator, put it, "Relieving tensions and fostering cooperation is crucial for both nations' interests. It's unlikely that we will fundamentally change the global economy, but there are undoubtedly opportunities for mutual growth and satisfaction."
Aowen Cao contributed from Beijing.
Copyright 2025 NPR
- The reduction in US-China tariffs and the revitalization of their trade talks offer hope for the global economy, which has been struggling due to the effects of escalating trade disputes.
- The agreement signed by both countries involves lowering the US tariffs on Chinese goods from a minimum of 145% to a base tariff of 30% and China lowering its tariffs from a minimum of 125% to 10% on US goods.
- The negotiations between the US and China are not just about trade and finance but also about addressing issues like fentanyl trafficking, as both countries aim to establish a balanced relationship in the business and political landscape.
