US, China agree to slash tariffs in bid to end trade war

The US and China have agreed to a sweeping reduction in tariffs on each other’s goods, marking a major de-escalation in a trade war that has roiled global markets and strained bilateral ties.

In a joint announcement on Monday following two days of high-stakes negotiations in Geneva, Switzerland the world’s two largest economies said they would suspend most of the punitive tariffs that have battered trade flows since the re-election of Donald Trump as US president.

The deal includes a 90-day pause on further measures and sees reciprocal tariffs lowered from 125 per cent to 10 per cent — a cut of 115 percentage points. US Treasury Secretary Scott Bessent confirmed the agreement.

Tariffs related to fentanyl and other targeted restrictions will remain in place, but the broad rollback represents the most significant thaw in US-China trade relations since the start of the Trump administration’s second term.

The two sides, in a joint statement, said they “will establish a mechanism to continue discussions about economic and trade relations,”

The breakthrough follows months of rising tensions, during which Washington imposed tariffs as high as 145 per cent on Chinese goods, prompting Beijing to retaliate with matching 125 per cent duties. The tit-for-tat measures had sharply curtailed bilateral trade, triggered inflationary pressures in the US, and disrupted China’s export-driven economy.

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