The United States and China on Monday announced an agreement to significantly reduce tariffs for 90 days while trade negotiations continue after top American and Chinese officials met in Switzerland over the weekend.
The deal means that President Donald Trump’s 125% reciprocal tariff on China will be reduced to 10%, with a 20% fentanyl tariff still in place, a significant drop from the 145% tariff placed on Chinese goods in the last few weeks. China will drop its retaliatory tariffs on the United States from 125% to 10%. The reductions are to be in place by Wednesday, May 14.
“After taking the aforementioned actions, the Parties will establish a mechanism to continue discussions about economic and trade relations,” said a joint statement from the United States and China. “These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues.”
U.S. Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and China Vice Premier of the State Council He Lifeng will continue discussions.
“I would say one of the big takeaways from this weekend — the United States will continue a strategic rebalancing in many areas that were exposed as supply chain weaknesses during COVID, whether it’s medicines, whether it’s semiconductors, steel,” Bessent said. “We will continue moving toward U.S. independence or reliable supplies from allies on those — but the consensus from both delegations this weekend is neither side wants a decoupling.”
Bessent added that he would like to see China open to more American goods and said that the two countries now have a mechanism in place to continue trade discussions. He later told CNBC that he expected to meet with Chinese officials again in a few weeks to work toward a more “fulsome agreement.”
“We tried to identify shared interest,” he said. “We came with a list of problems that we were trying to solve, and I think we did a good job on that.”
In another interview, Bessent said that the Biden administration had failed to make China abide by previous trade agreements.
“We had an excellent trade agreement with China — and the Biden Administration chose not to enforce it,” he said. “The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations.”
.@SecScottBessent: “We had an excellent trade agreement with China — and the Biden Administration chose not to enforce it. The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations.” pic.twitter.com/Sv8pxVrazf
— Rapid Response 47 (@RapidResponse47) May 12, 2025
Greer noted that Chinese officials had indicated that they would be taking more steps to crackdown on the flow of fentanyl originating in China into the United States.
“Both the Chinese and the United States agreed to work constructively together on fentanyl and there’s a positive path forward there as well,” he told reporters.
Bessent noted that the Chinese Deputy Minister for Public Safety, who he noted was not “traditionally part of the trade team,” was present at the talks over the weekend. He said that official had a “robust and highly detailed” discussion on the fentanyl issue.
Stock markets worldwide surged due to the temporary agreement, and the U.S. stock futures also jumped.