US, China suspend bulk of tariffs on each other’s goods

The two countries said they will slash tariffs by 115pc and ‘establish a mechanism to continue discussions about economic and trade relations’.

US President Donald Trump and Chinese President Xi Jinping. Picture: AP

The US and China said on Monday they have agreed to suspend most of the tariffs on each other’s goods while further trade negotiations continue.

The US said it would lower its “reciprocal” tariff on Chinese goods to 10 per cent from 125 per cent.

China said it would lower its tariff on US goods to 10 per cent from 125 per cent.

US tariffs related to fentanyl and other measures will remain.

The two countries said they “will establish a mechanism to continue discussions about economic and trade relations”.

The announcement concludes two days of marathon talks in Switzerland aimed at easing tensions over trade between the world’s two biggest economies.

Since starting his second term, US President Donald Trump has slapped 145 per cent tariffs on Chinese goods while Beijing has hit back with 125 per cent duties on imports from the US.

That has led bilateral trade to nearly dry up, heightening inflationary pressure in the US and threatening the export engine powering Chinese growth.

Officials from the US and China had wrapped up their weekend, high-stakes trade talks on Sunday, with Beijing saying the two sides had agreed to start a formal negotiation process and Washington touting progress toward a deal.

Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, who led the US delegation, said substantial progress was made during the marathon discussions with their Chinese counterparts, led by Chinese Vice-Premier He Lifeng.

The talks were “productive,” Mr Bessent said. “It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” he said.

US Secretary of the Treasury Scott Bessent during the trade relations and tariff talks in Geneva, on May 9. Picture: FDFA/AFP

Mr Bessent noted the US’s massive trade deficit was why President Donald Trump declared a national emergency and imposed tariffs on China and other nations.

“We’re confident the deal we struck with our Chinese partners will help us to work towards resolving that national emergency,” Mr Greer said.

The White House issued a statement after the duo’s briefing, titled “US Announces China Trade Deal in Geneva”. The statement included Greer and Bessent’s remarks from Switzerland, but nothing else.

The state-run Xinhua New Agency said both sides agreed to establish an “economic and trade consultation mechanism” that would involve recurring discussions.

The agency also said the US and China would release a joint statement – a rare occurrence in recent years as bilateral relations have been strained.

The talks spanned at least eight hours on Saturday and several hours on Sunday, setting the stage for a potential thawing of trade relations between the world’s two largest economies.

Chinese Vice Premier He Lifeng in Geneva, Switzerland. Picture: Keystone via AP

Mr Trump posted on social media after the first day of talks concluded, saying great progress was made. “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,” he wrote, without offering details.

“We want to see, for the good of both China and the US, an opening up of China to American business.”

Beijing viewed the weekend talks less as an opportunity to reset bilateral relations than as a chance to gauge whether the Trump administration intends to de-escalate trade tensions, according to people who consult with senior Chinese officials.

One said Beijing wanted to keep talking to bring down the tariff levels.

Mr He, who is leader Xi Jinping’s gatekeeper to the world’s second-largest economy, focused his talks with his American counterparts on issues of core concern to Beijing, including the sky-high US tariffs and new US port fees on Chinese-made-and-operated vessels, the sources said.

The Wall Street Journal