The United States and China have agreed a deal to slash reciprocal tariffs, as Washington and Beijing seek to end a trade war that has sparked fears of a global economic recession, officials announced on Monday.
Speaking after talks with Chinese officials in Geneva, US Treasury Secretary Scott Bessent told reporters the two sides had reached a deal for a 90-day pause on measures and that “reciprocal” tariffs would come down over 100 percentage points to 10%.
“We’ve had a plan. We have a process in place. And now with the Chinese, we have a mechanism for continued talks,” Mr Bessent said.“We both have an interest in balanced trade, the US will continue moving towards that.”
Mr Bessent spoke alongside US Trade Representative Jamieson Greer after the weekend “robust” discussions in which both sides had hailed progress on narrowing differences.
China’s inistry of commerce says it hopes the US will "keep working with China" on trade, adding that tariff cuts, which come into force on Wednesday, are in the "common interest of the world".
The meetings in Switzerland were the first face-to-face interactions between senior US and Chinese economic officials since Donald Trump returned to power and launched a global tariff blitz, imposing particularly hefty duties on China.
Since taking office in January, Mr Trump has hiked the tariffs paid by US importers for goods from China to 145%, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.
China hit back by putting export curbs on some rare earth elements, vital for US manufacturers of weapons and electronic consumer goods, and raising tariffs on American goods to 125%.
The tariff dispute brought nearly $600 billion (£455 billion) in two-way trade to a standstill, disrupting supply chains, sparking fears of stagflation and triggering some layoffs.
Financial markets have been looking out for signs of a thaw in the trade war and Wall Street stock futures climbed and the dollar firmed on Monday as the talks boosted hopes a global recession might be avoided.
Hong Kong's Hang Seng index rose sharply at the tariffs announcement, up by 3.4% as of 3.30pm local time.
Meanwhile, the value of the US dollar and Chinese Yuan rose at the news of the suspension, and the value of Brent Crude — the leading global price benchmark for Atlantic basin crude oils — increased by 2.8%.
