US and China agree temporary tariff de-escalation

A weekend of negotiations in Geneva have produced an agreement between the US and China that will see a reduction in tariff levels starting 14 May. 

The deal is a temporary, 90-day de-escalation in a months-long, tariff-led, tit-for-tat trade war that began shortly after US President Donald Trump took his second term in January 2025. Mr Trump has rocked markets and repeatedly rattled investors and allies with a series of threats, U-turns and tariff levies, with China ultimately on the receiving end of 145% import tariffs for goods headed to the US. 

As US tariff levels increased, China initially held off raising its own tariffs on US imports but eventually fired back with duties that reached 125%. 

Announcing the deal, US Treasury Secretary Scott Bessent said  "Both sides on the reciprocal tariffs will move their tariffs down 115%", taking US tariffs on China to 30% and Chinese tariffs on the US to 10%. 

“We want more balanced trade, and I think both sides are committed to achieving that,” Mr Bessent said.

A joint statement from the two countries said they will continue to work toward further improvements in trade relations, with China’s Vice Premier He Lifeng joining Mr Bessent and Jamieson Greer of the United States Trade Representative (USTR). In late-April, the USTR confirmed a wide-ranging plan to levy port fees, mostly targeted at Chinese-built, owned or operated vessels. The fees are set to begin in October 2025. 

"These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues," the statement said.

Container shipping giant Maersk called the US-China agreement "a step in the right direction".

"We hope it can lay the foundation for the parties to also reach a permanent deal that can create the long-term predictability our customers need. Right now, our customers have gotten 90 days of clarity with reduced tariffs, and we are working hard to help them make the best use of this window," Maersk said.