Written by Kelly Were
Geneva, May 12, 2025 — In a stunning and market-shaking breakthrough, the United States and China have agreed to significantly roll back tariffs on each other’s goods for an initial 90-day period, marking a major de-escalation in a trade war that has rattled the global economy for years.
The agreement, announced in a joint statement late Monday, follows marathon negotiations in Geneva between top officials from both countries. The statement said both sides made “substantial progress” and reaffirmed a shared commitment to building a “sustainable, long-term, and mutually beneficial economic and trade relationship.”
Under the terms of the deal, effective by May 14, the U.S. will slash its tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on American goods from 125% to 10%.
The agreement also outlines the creation of a formal mechanism to maintain ongoing dialogue. This high-level trade and economic discussion platform will be led by Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer. Meetings may rotate between China, the U.S., or even a neutral third country.
“As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” the statement added.
The immediate reaction from global markets was euphoric. Dow futures jumped over 2%, S&P 500 futures climbed nearly 3%, and the Nasdaq Composite soared by more than 3.5% during Asian afternoon trading. Hong Kong’s Hang Seng Index surged over 3%, echoing a global sigh of relief.
The agreement marks the most significant thaw in trade tensions since U.S. President Donald Trump launched his tariff offensive that triggered a cascade of retaliatory measures, snarled global supply chains, and amplified fears of a worldwide recession.
While analysts caution that many thorny issues remain unresolved, this initial truce offers a rare flash of optimism in an otherwise fraught geopolitical landscape.
This is a developing story. More details to follow.
