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By Shane Croucher and Micah McCartney
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China hailed a trade agreement with the U.S. that will see both sides sharply reduce their tariffs for 90 days, calling it an "important step" that could lead to "deepening cooperation" between the world's two largest economies.
Why It Matters
The deal was announced by U.S. Treasury Secretary Scott Bessent following talks with Chinese Vice Premier He Lifeng and other Chinese officials in Geneva, Switzerland, over the weekend.
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President Donald Trump dramatically hiked tariffs in early April in a bid to reduce the trade deficit and revive U.S. manufacturing. The tariffs brought nearly $600 billion in annual bilateral trade to a standstill and rattled the world's two largest economies.
Newsweek reached out to China's Foreign Ministry and the White House via emailed requests for comment.
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What To Know
Both sides agreed to reduce their respective tariff rates by 115 percent.
This means the U.S. will maintain tariffs totaling 30 percent—a 10 percent baseline and a 20 percent penalty tied to China's role as a source of chemical ingredients used in fentanyl. These tariffs are in addition to those imposed during Trump's first term and later upheld by his successor, former President Joe Biden.
China will retain its baseline tariff rate of 10 percent on American goods and suspend other countermeasures it announced last month, including restrictions on exports of rare earth minerals critical to both defense and civilian technologies.
"The high tariffs imposed by the United States have seriously undermined normal bilateral economic and trade exchanges and seriously undermined the international economic and trade order," a spokesperson for the Chinese commerce ministry said in a statement, per the state news agency Xinhua.
"The joint statement reached at the talks is an important step taken by the two sides to resolve their differences through dialogue and consultation on an equal footing, and has laid the foundation and created conditions for further bridging differences and deepening cooperation."
The ministry spokesperson also said the U.S. and China "will establish a mechanism to continue consultations on economic and trade relations," which will take place during the 90-day pause.
The dollar surged Monday after the weekend deal announcement, reflecting investor optimism after weeks of recession fears tied to steep tariffs.
What People Are Saying
President Donald Trump wrote on Truth Social Sunday: "A very good meeting today with China, in Switzerland. Many things discussed, much agreed to. A total reset negotiated in a friendly, but constructive, manner. We want to see, for the good of both China and the U.S., an opening up of China to American business. Great Progress Made!"
Zhiwei Zhang, chief economist at Pinpoint Asset Management in Hong Kong, told France 24: "This is better than I expected. I thought tariffs would be cut to somewhere around 50 percent. Obviously, this is very positive news for economies in both countries and for the global economy, and makes investors much less concerned about the damage to global supply chains in the short term."
What's Next
It remains to be seen how negotiations will unfold during the 90-day cooling-off period and whether the Trump administration can significantly narrow the nearly $300 billion trade deficit with China—a long-standing concern for the president.
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