The United States and China have reached a landmark trade agreement aimed at reducing tariffs, eliminating retaliatory measures, and creating a framework for future economic discussions. The deal was announced shortly after another significant agreement between the U.S. and the United Kingdom. In a joint statement issued following successful negotiations in Geneva, Switzerland, both nations emphasized the importance of their bilateral economic and trade relationship, acknowledging their roles in the global economy.
Under the agreement, both countries will lower tariffs by 115% while maintaining an additional 10% tariff. These changes must be implemented by May 14, 2025. China will remove the retaliatory tariffs it announced since April 4, 2025, and suspend additional non-tariff countermeasures enacted since April 2, 2025.
The United States will remove additional tariffs imposed on China on April 8 and April 9, 2025, but retain earlier duties, including Section 301 and Section 232 tariffs. China will suspend its initial 34% tariff on U.S. goods announced on April 4, 2025, for 90 days while maintaining a 10% tariff during this period. The United States will also suspend its reciprocal 34% tariff imposed on April 2, 2025, for 90 days, with a 10% tariff still in place.
Landmark trade pact negotiations yield results
The U.S. goods trade deficit with China was $295.4 billion in 2024. The agreement aims to address these imbalances, bringing lasting benefits to American workers, farmers, and businesses.
Future discussions will involve He Lifeng, Vice Premier of the State Council, representing China, and Scott Bessent, Secretary of the Treasury, along with Jamieson Greer, United States Trade Representative, representing the United States. Both nations have also committed to taking aggressive actions to curb the flow of fentanyl and precursor chemicals from China to illicit producers in North America, addressing a significant public health issue. The announcement of the trade deal has buoyed global markets, with Dow futures surging more than 2%, S&P 500 futures rising nearly 3%, and the tech-heavy Nasdaq Composite futures increasing by over 3.5% during Asian afternoon trading.
Asian markets also responded positively, with Hong Kong’s Hang Seng index closing about 3% higher. Dan Ives, a managing director at Wedbush Securities in New York, called the agreement to suspend most tariffs a “best case scenario,” adding that this is likely just the start of broader negotiations, which could see tariffs move down further over the coming months. Speaking at a Monday press conference in Geneva, Bessent said, “The consensus from both delegations is neither side wants to be decoupled, and what has occurred with these very high tariffs was equivalent to 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.”
A spokesperson for China’s Commerce Ministry called the joint statement “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.”
The substantial, if temporary, breakthrough was unexpected, as just last week, Bessent sought to manage expectations by suggesting that his goal for the talks was “de-escalation” rather than a major trade deal.
