In a major easing of trade tensions, the U.S. and China have agreed to temporarily lower tariffs on each other’s goods, giving both sides 90 days to pursue a broader trade deal, according to Jenny Leonard of Bloomberg. U.S. tariffs on most Chinese imports will drop from 145% to 30%, while China will reduce duties from 125% to 10%. Treasury Secretary Scott Bessent emphasized this is not a full decoupling, but a targeted shift focused on national security items. While key Trump-era tariffs remain, the truce has boosted markets and may pave the way for further negotiations. China has also agreed to lift recent non-tariff measures like rare earth export restrictions. Still, long-term outcomes remain uncertain given past failures to enforce deals. Leonard writes:
The US and China will temporarily lower tariffs on each other’s products in a dramatic ratcheting down of trade tensions that buys the world’s two largest economies three months to work toward a broader agreement.
The combined 145% US levies on most Chinese imports will be reduced to 30% including the rate tied to fentanyl by May 14, while the 125% Chinese duties on US goods will drop to 10%, according to a joint statement and from officials in a briefing Monday in Geneva. […]
“Just like with all our other trading partners, as long as there is good faith effort, engagement and constructive dialog, then we will keep moving forward,” he said.
Stocks and the dollar soared on the news, with S&P 500 futures up 3.1% as of 8:19 a.m. in New York. Oil prices advanced, Treasury yields rose. The offshore yuan climbed about 0.5%. China’s bonds fell, with the 30-year yield climbing by six basis points, the most since March, to 1.95%. […]
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