After weeks of heightened tension and a steep escalation in tariffs, the United States and China have agreed to begin a new chapter in their trade relations. Following a two-day high-level meeting in Geneva, Switzerland, both nations have reached a preliminary trade agreement aimed at de-escalating the ongoing tariff war that had threatened global economic stability.
The breakthrough comes after tit-for-tat tariff increases saw U.S. duties on Chinese goods climb to 145%, while U.S. exports to China faced retaliatory tariffs of up to 125%. The trade conflict, initiated under the directive of President Donald Trump to protect American industries, pushed China to initially seek recourse through the World Trade Organisation (WTO), before adopting its own tariff measures.
The recent Geneva talks were led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. The new agreement, effective from May 14, 2025, includes a 90-day suspension of 24 percentage points from the newly imposed ad valorem tariffs by both countries, with a residual 10% duty still in effect. The U.S. also agreed to eliminate tariff measures introduced in April under Executive Orders 14259 and 14266. China will reciprocate by withdrawing tariffs issued under its State Council Announcements No. 5 and No. 6, and suspend non-tariff countermeasures targeting the U.S.
“This is only the beginning,” said Secretary Bessent. “But it marks substantial progress in resolving one of the most pressing trade disputes of our time.”
As part of the agreement, a bilateral mechanism will be established to oversee ongoing trade negotiations. This mechanism will involve regular discussions between top officials from both countries, including Jamieson Greer, the U.S. Trade Representative, and Chinese Vice Premier He Lifeng. Meetings may alternate between the U.S., China, or a neutral third country, ensuring continuous engagement.
While the deal does not end the tariff regime completely, it signifies a mutual willingness to move towards cooperation and away from escalating economic confrontation. More developments are expected in the coming weeks as working-level consultations take place to iron out further details and long-term frameworks.
