US and China agree to slash reciprocal tariffs in major step toward easing trade war

The United States and  said Monday they had agreed to a 90-day pause on most of the  on each other since last month, in a major step toward easing a trade war between the two powers that has rattled the global economy.

U.S. tariffs on Chinese imports will be cut to 30% from 145%, while China’s levies on U.S. imports will be cut to 10% from 125%, the two countries said in a .

The announcement comes after officials from the two countries met in Geneva, Switzerland, over the weekend for their first face-to-face talks on the tariffs, which began mounting after President ’s April 2 announcement of sweeping global duties. The tariffs have made trade between the world’s two largest economies all but impossible and threatened to upend the global economy.

“We were able to have very constructive and positive conversations with our Chinese counterparts, who clearly came to deal this week,” U.S. Trade Representative Jamieson Greer said at a news conference in Geneva.

The Chinese Ministry of Commerce said the agreement was an “important step” and “creates favorable conditions for further narrowing differences and deepening cooperation.”

“It is hoped that the U.S. will build on the foundation of this meeting, continue to work in the same direction with China” and “completely correct its unilateral tariff practices,” a spokesperson said.

The two countries said they would also “establish a mechanism to continue discussions about economic and trade relations.” The U.S. will continue to be represented by Treasury Secretary Scott Bessent and Greer, while China will continue to be represented by Vice Premier He Lifeng.

The discussions may take place alternately in China and the U.S., or in a third country agreed upon by both countries. The two sides may also conduct working-level consultations on relevant economic and trade issues.

The afternoon announcement sent Hong Kong’s Hang Seng index soaring and the Chinese index closed more than 3% up. Mainland Chinese markets closed higher before details of the agreement were released.

European indexes were also trading higher early Monday, with U.S. stocks leaping in pre-market trading. The Dow Jones Industrial Average was up 2% and the S&P 500 index was up 2.6%.

Markets across Asia had upbeat sessions Monday in anticipation of some kind of agreement from the U.S.-China talks, as well as a  that seems to be holding after conflict erupted between the two South Asian rivals last week.

The U.S.-China tariff agreement “will save medium and small enterprises on both sides of the Pacific,” said Tianchen Xu, a Beijing-based economist at the Economist Intelligence Unit, a financial forecasting service.

It will come as “a very big relief for struggling small Chinese exporters, some of which have already lost U.S. orders for weeks,” he said in emailed comments.

U.S. importers, meanwhile, “will be able to avoid a surge in import costs,” he said. “This carries positive implications for the overall economy and the labor market.”

The agreement exceeded expectations and has “rekindled global hope,” said Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin University of China.

But Xu and Wang both cautioned that many difficult issues remain to be resolved and the trade war could potentially reignite.

“This situation is a major test of the political wisdom and negotiation capability of the decision-makers in both China and the U.S.,” Wang said.

This is a developing story. Please check back for updates.

Mithil Aggarwal and Dawn Liu contributed.

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