(Bloomberg) — Supply Lines is a daily newsletter that tracks global trade.聽Sign up here.
The US and China will temporarily lower tariffs on each other鈥檚 products, according to a joint statement, in a move to cool trade tensions and give the world鈥檚 two largest economies three more months to resolve their differences.
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 the statement and officials in a briefing Monday in Geneva.
Subscribe to the Bloomberg Daybreak Podcast on Apple, Spotify and other Podcast Platforms.
Bessent added that the tariff reductions announced today don鈥檛 apply to sectoral duties imposed on all US trading partners, and the tariffs applied on China during the first Trump administration remain in place.聽
鈥淲e are in agreement that neither side wants to decouple,鈥 Treasury Secretary Scott Bessent said, adding that 鈥渨e had a very robust and productive discussion on steps forward on fentanyl鈥 and that talks might lead to 鈥減urchasing agreements鈥 by China.
Equity markets in Asia and Europe rose after the announcement, and US futures hit session highs. Oil prices increased, Treasury yields gained and the dollar was stronger. The offshore yuan extended gains against the dollar, rising about 0.5%.
The US statement also said 鈥渢he parties will establish a mechanism to continue discussions about economic and trade relations.鈥
Beijing鈥檚 Response
China has always handled relations with the US based on the principles of mutual respect, the official Xinhua News Agency reported, citing a white paper on national security. China is committed to the stable development of relations with US, it said, and imposing pressure and threats are not the right way to deal with China.
The announcement represents a step toward de-escalating a tariff war that has led to an immediate slump in trade across the Pacific Ocean. The two countries had earlier reported 鈥渟ubstantial progress鈥 in their talks, which buoyed markets and helped Chinese stocks recoup their losses since President Donald Trump鈥檚 鈥淟iberation Day鈥 announcement of tariffs on April 2.
Trade Representative Jamieson Greer said the US wants to have more balanced trade with China and 鈥渙ur Chinese counterparts clearly came to deal this week.鈥
The White House called the agreement a 鈥渢rade deal鈥 in an initial statement on Sunday, but it is still unclear what an acceptable goal is for both sides or how long it will take to get there. China previously demanded that the US remove all the tariffs it has imposed this year, which is incompatible with the US objective of reducing or ending the trade deficit.
While markets greeted recent reports of progress, history suggests that it could take a long time to reach a detailed agreement, if one is possible. In 2018, the two sides also agreed to put their dispute 鈥渙n hold鈥 after a round of negotiations, but the US soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the 鈥淧hase One鈥 trade deal in January 2020.
In the end, China failed to live up to the purchase agreement in that deal and the US trade deficit with China jumped during the pandemic, setting up the current trade war.
—With assistance from James Mayger.
(Adds markets, China statement in fifth and seventh paragraphs)
More stories like this are available on
漏2025 Bloomberg L.P.
(Bloomberg) — Supply Lines is a daily newsletter that tracks global trade.聽Sign up here.
The US and China will temporarily lower tariffs on each other鈥檚 products, according to a joint statement, in a move to cool trade tensions and give the world鈥檚 two largest economies three more months to resolve their differences.
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 the statement and officials in a briefing Monday in Geneva.
Subscribe to the Bloomberg Daybreak Podcast on Apple, Spotify and other Podcast Platforms.
Bessent added that the tariff reductions announced today don鈥檛 apply to sectoral duties imposed on all US trading partners, and the tariffs applied on China during the first Trump administration remain in place.聽
鈥淲e are in agreement that neither side wants to decouple,鈥 Treasury Secretary Scott Bessent said, adding that 鈥渨e had a very robust and productive discussion on steps forward on fentanyl鈥 and that talks might lead to 鈥減urchasing agreements鈥 by China.
Equity markets in Asia and Europe rose after the announcement, and US futures hit session highs. Oil prices increased, Treasury yields gained and the dollar was stronger. The offshore yuan extended gains against the dollar, rising about 0.5%.
The US statement also said 鈥渢he parties will establish a mechanism to continue discussions about economic and trade relations.鈥
Beijing鈥檚 Response
China has always handled relations with the US based on the principles of mutual respect, the official Xinhua News Agency reported, citing a white paper on national security. China is committed to the stable development of relations with US, it said, and imposing pressure and threats are not the right way to deal with China.
The announcement represents a step toward de-escalating a tariff war that has led to an immediate slump in trade across the Pacific Ocean. The two countries had earlier reported 鈥渟ubstantial progress鈥 in their talks, which buoyed markets and helped Chinese stocks recoup their losses since President Donald Trump鈥檚 鈥淟iberation Day鈥 announcement of tariffs on April 2.
Trade Representative Jamieson Greer said the US wants to have more balanced trade with China and 鈥渙ur Chinese counterparts clearly came to deal this week.鈥
The White House called the agreement a 鈥渢rade deal鈥 in an initial statement on Sunday, but it is still unclear what an acceptable goal is for both sides or how long it will take to get there. China previously demanded that the US remove all the tariffs it has imposed this year, which is incompatible with the US objective of reducing or ending the trade deficit.
While markets greeted recent reports of progress, history suggests that it could take a long time to reach a detailed agreement, if one is possible. In 2018, the two sides also agreed to put their dispute 鈥渙n hold鈥 after a round of negotiations, but the US soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the 鈥淧hase One鈥 trade deal in January 2020.
In the end, China failed to live up to the purchase agreement in that deal and the US trade deficit with China jumped during the pandemic, setting up the current trade war.
—With assistance from James Mayger.
(Adds markets, China statement in fifth and seventh paragraphs)
More stories like this are available on
漏2025 Bloomberg L.P.
