The United States and China said Monday they reached an agreement to temporarily reduce the punishing tariffs they have imposed on each other in an attempt to defuse the trade war threatening the world’s two largest economies.
In a joint statement, the countries said they would suspend their respective tariffs for 90 days while they negotiate. Under the agreement, the United States would reduce the tariff on Chinese imports to 30 percent from its current 145 percent, while China would lower its import duty on American goods to 10 percent from 125 percent.
“We concluded that we have a shared interest,” said Treasury Secretary Scott Bessent at a news conference in Geneva where U.S. and Chinese officials met over the weekend. “The consensus from both delegations is that neither side wanted a decoupling,” he said.
The agreement breaks an impasse that had brought trade between China and the United States to a halt. Many American businesses had suspended orders, holding out hope that the two countries could strike a deal to bring down the tariff rates while raising the possibility of price increases.
Chinese factories also experienced a sharp decline in orders for export to the United States, heaping additional pressure on a sluggish economy.
Global markets jumped on the announcement. The benchmark index in Hong Kong surged 3 percent, about the same amount as S&P 500 stock futures.
Mr. Bessent and Jamieson Greer, the United States Trade Representative, for the Trump administration, said the two countries had substantive discussions on U.S. demands that Beijing crack down on the trafficking of the chemical ingredients used to make fentanyl. Mr. Bessent said the Chinese “understood the magnitude” of the fentanyl crisis in the United States.
Mr. Trump initially added a 20 percent tariff to Chinese exports, accusing the country of not doing enough to stop the flow of fentanyl to the United States. That punitive tariff remains in place.
Mr. Greer said the negotiations were underscored by “mutual understanding and mutual respect,” but noted that China was the only country to retaliate against the United States after President Trump imposed so-called reciprocal tariffs on dozens of countries last month.
This is a developing story. Check back for updates.
Christopher Buckley contributed reporting from Taipei, Taiwan and Nick Cumming-Bruce from Geneva.