Geneva (Brussels Morning Newspaper) – The United States and China have reached an agreement to temporarily reduce reciprocal tariffs, a deal that exceeded expectations as the world’s two largest economies strive to resolve a harmful trade war that has heightened recession fears and unsettled financial markets.

The announcement, made in a joint statement, follows a weekend of extensive trade negotiations in Geneva, Switzerland, between officials from the two largest economies, who both claimed to have achieved “substantial progress.”

The Geneva meetings marked the first in-person discussions between high-ranking U.S. and Chinese economic officials since Trump resumed office and initiated a global tariff campaign, especially imposing significant tariffs on China.

How will both countries proceed with cutting down tariffs?

The U.S. announced it will reduce additional tariffs on Chinese imports from 145% to 30%, while China will lower its duties on U.S. imports from 125% to 10%. These new measures will remain in effect for 90 days.

“Both countries represented their national interest very well,”

U.S. Treasury Secretary Scott Bessent said after talks with Chinese officials in Geneva.

“We both have an interest in balanced trade; the U.S. will continue moving towards that.”

A spokesperson from China’s Commerce Ministry described the joint statement as

“an important step by both sides to resolve differences through dialogue and consultation on equal footing, paving the way and establishing conditions for further gap bridging and enhanced cooperation.”

Bessent spoke with U.S. Trade Representative Jamieson Greer following the weekend discussions in Switzerland, where both parties acknowledged progress in bridging their differences.

“The consensus from both delegations this weekend is neither side wants a decoupling,”

Bessent said.

“And what had occurred with these very high tariffs … was the equivalent of an embargo, and neither side wants that. We do want trade.”

Bessent stated that the agreement did not involve sector-specific tariffs and that the U.S. would maintain its strategic rebalancing in sectors such as medicines, semiconductors, and steel, where supply chain vulnerabilities have been identified.

How did financial markets react to the tariff deal?

As reported, the dollar strengthened against other major currencies, and stock markets increased after the news, which eased fears of a downturn sparked last month by U.S. President Donald Trump’s heightened tariff actions intended to reduce the U.S. trade deficit. 

Since January, Trump has raised tariffs for U.S. importers on goods from China to 145%, adding to those he implemented during his first term and the duties established by the Biden administration.