The United States and China have agreed to a temporary easing of trade tensions, with both sides significantly reducing tariffs on each other’s goods as part of a broader effort to resume negotiations, according to a joint statement released over the weekend.
Under the agreement, the U.S. will reduce overall tariffs on Chinese imports from 145% to 30%, while China will lower its levies on American goods from 125% to 10%. The changes mark the first major de-escalation in the trade dispute since punitive duties were first imposed under the Trump administration.
The prolonged trade war has weighed on both economies. The U.S. reported its first quarterly contraction in GDP since early 2022, driven in part by businesses rushing to import goods ahead of higher tariffs. In China, exports to the U.S. dropped sharply last month, with factory activity contracting at its fastest pace in 16 months, highlighting the strain on the country’s vast manufacturing sector and prompting fresh stimulus measures from Beijing.
Dan Ives, managing director at Wedbush Securities in New York, described the outcome of the latest talks as a constructive shift. “This is clearly just the start of a broader and more comprehensive negotiations, and we would expect both these tariff numbers to move down markedly over the coming months as deal talks progress,” he wrote in a research note, calling the suspension of most tariffs a “best case scenario.”
As part of the agreement, the two countries will also establish a formal channel for continued dialogue on trade and economic issues, led by Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer.
“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” the joint statement said.
At a press briefing in Geneva on Monday, Bessent emphasized that both countries are seeking to avoid further economic fragmentation. “The consensus from both delegations is neither side wants to be decoupled, and what have occurred with these very high tariffs … was an equivalent of an embargo, and neither side wants that. We do want trade. We want more balance in trade. And I think both sides are committed to achieving that,” he said.
A spokesperson for China’s Commerce Ministry welcomed the joint statement as “an important step by both sides to resolve differences through equal-footing dialogue and consultation, laying the groundwork and creating conditions for further bridging gaps and deepening cooperation.”
Beijing’s conciliatory tone represents a notable shift from recent weeks, during which Chinese officials had insisted that the U.S. remove all tariffs before entering formal negotiations. The joint statement signals a departure from that hardline stance.
The agreement was seen as unlikely just days earlier, when Bessent sought to temper expectations. “De-escalation,” not a major deal, was his stated goal. The shift comes after months of stalled negotiations and increasing concerns from both business communities about the long-term consequences of prolonged economic decoupling.
