The US and China Reach Provisional Tariff Agreement in Geneva: Significant Tariff Reduction Over the Next 90 Days Aimed at Easing Trade Tensions

Taiwan • Business • 05/12 08:57
The US and China Reach Provisional Tariff Agreement in Geneva: Significant Tariff Reduction Over the Next 90 Days Aimed at Easing Trade Tensions

On May 12, 2025, after high-level economic and trade talks between the United States and China in Geneva, Switzerland, the United States and China announced a temporary 90-day tariff agreement. The United States will lower tariffs on Chinese goods from 145% to 30%, while China will lower tariffs on American goods from 125% to 10%. This move is intended to ease trade tensions and set up a framework for future economic and trade talks. Both parties committed to implementing the tariff adjustments by May 14 and suspending or canceling most retaliatory measures.

Key Updates

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05/12 08:57

The US and China Reach Provisional Tariff Agreement in Geneva: Significant Tariff Reduction Over the Next 90 Days Aimed at Easing Trade Tensions

On May 12, 2025, after high-level economic and trade talks between the United States and China in Geneva, Switzerland, the United States and China announced a temporary 90-day tariff agreement. The United States will lower tariffs on Chinese goods from 145% to 30%, while China will lower tariffs on American goods from 125% to 10%. This move is intended to ease trade tensions and set up a framework for future economic and trade talks. Both parties committed to implementing the tariff adjustments by May 14 and suspending or canceling most retaliatory measures.

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Agreement Content and Specific Tariff Adjustments

According to the joint statement released by both parties on May 12, the US and China agreed to temporarily lower the retaliatory tariffs imposed on each other starting May 14, for a period of 90 days. The specific adjustments are as follows:

  • The US will reduce the overall tariff rate on Chinese goods from 145% to 30%. This includes:

    • Of the 34% reciprocal tariff imposed under Executive Order No. 14257 on April 2, 2025, 24% will be suspended for 90 days, keeping 10%;
    • Canceling the 50% and 41% tariffs imposed on April 8 and April 9, respectively (from Executive Orders No. 14259 and No. 14266);
    • Retaining the 20% punitive tariff imposed due to the fentanyl issue.

  • China will reduce the overall tariff rate on US goods from 125% to 10%. Specifically, this includes:

    • Of the 34% reciprocal tariff imposed under Announcement No. 4 of 2025, 24% will be suspended for 90 days, keeping 10%;
    • Canceling the remaining tariffs imposed under Announcements No. 5 and No. 6 of 2025;
    • Simultaneously suspending or revoking non-tariff countermeasures against the US since April 2.

Both parties stated that this round of tariff adjustments is equivalent to each reducing retaliatory tariffs by 115 percentage points, creating space for subsequent negotiations.

Agreement Background and Negotiation Process

This agreement was reached against the backdrop of rapidly escalating US-China trade tensions. Since early 2025, the Trump administration has imposed a series of high tariffs on Chinese goods, up to 145%, including a 20% punitive tariff related to the fentanyl issue. China responded by imposing retaliatory tariffs of up to 125% on US goods.

From May 10 to 11, representatives from both sides conducted a two-day closed-door meeting in Geneva, Switzerland. The US delegation was led by Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, while the Chinese side was led by Vice Premier He Lifeng, including senior officials such as Minister of Public Security Wang Xiaohong. Wang Xiaohong's presence indicated the importance of the fentanyl issue in the negotiations.

After the meeting, both parties jointly released a statement on May 12, announcing the temporary tariff agreement and emphasizing that neither side wishes to "decouple," hoping to resolve differences through dialogue and promote the establishment of a "sustainable, long-term, and mutually beneficial" economic and trade relationship.

Official Statements and Positions of Both Parties

US Treasury Secretary Bessent stated at a press conference: "Our discussions were very productive, and neither side wishes to decouple. We hope for more balanced trade, which is our common goal." He also noted that both sides had "in-depth and fruitful discussions" on the fentanyl issue, with China "understanding the severity of the fentanyl crisis in the US."

US Trade Representative Greer added: "The fact that we could quickly reach a consensus shows that the differences between us may not be as large as imagined." He emphasized that the Trump administration's primary task remains to reduce the US trade deficit with China.

Chinese representative He Lifeng stated: "The high-level economic and trade talks between China and the US were candid, in-depth, and constructive, reaching important consensus and taking a significant step towards resolving differences through equal dialogue and consultation." Chinese trade negotiator Li Chenggang said: "No matter when this statement is released, it's good news for the world."

Economic and Trade Consultation Mechanism and Follow-up Arrangements

According to the joint statement, both parties will establish a mechanism for ongoing consultations on economic and trade relations. This mechanism will be jointly led by Chinese Vice Premier He Lifeng, US Treasury Secretary Bessent, and US Trade Representative Greer. Consultations can alternate between China, the US, or a mutually agreed third country, and working-level consultations can be convened if necessary.

The statement noted that both parties recognize the importance of bilateral economic and trade relations to both countries and the global economy and will advance related work in the spirit of "mutual openness, continuous communication, cooperation, and mutual respect."

References

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