The United States and China on Monday, May 12, 2025, reached a breakthrough deal to temporarily cut tariffs, easing fears of a global recession.
Both governments resumed high-level economic talks in Geneva, the first since President Trump returned to the White House.
The U.S. slashed tariffs on Chinese imports from 145% to 30% for a 90-day period.
China responded by cutting tariffs on American goods from 125% to 10%, starting immediately.
U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent led the American delegation.
Chinese Vice Premier He Lifeng headed Beijing’s team at the World Trade Organization mission in Geneva.
Both sides described the talks as candid, in-depth, and constructive, according to statements after the meeting.
Investors reacted positively as U.S. stocks surged and the dollar strengthened following news of the tariff cuts.
Gold prices dropped as markets welcomed signs of easing tensions between the world’s top two economies.
The trade war previously halted nearly $600 billion in two-way commerce, damaging supply chains and causing job losses.
Trump had raised tariffs in April, citing national security and the fentanyl crisis as major concerns.
China hit back with export controls on rare earths and higher duties on American exports.
Maersk, the Danish shipping giant, reported major declines in U.S.-China trade volume last week.
The company’s stock jumped over 12% after officials announced the temporary trade reprieve.
Luxury groups like LVMH and Gucci-owner Kering also saw shares rise 7.4% and 6.7%, respectively.
Boeing, affected by delivery delays to China, declined to comment on the deal’s impact on aircraft sales.
Zhiwei Zhang of Pinpoint Asset Management called the agreement “better than expected” given recent harsh rhetoric.
He said the deal calmed investor fears about long-term supply chain disruption and stagflation risks.
Negotiators agreed to create a new economic dialogue forum to address structural trade issues.
Bessent confirmed plans to discuss non-tariff barriers, currency policies, labor subsidies, and market access for U.S. firms.
He said Chinese officials showed new willingness to
