Tariff Truce: US and China Reach Groundbreaking 90-Day Deal to Slash Import Taxes

In an unexpected diplomatic breakthrough, the US and China have successfully negotiated a deal aimed at reducing their mutual import tariffs for a 90-day period, signifying an important shift in trade relations between the two largest economies. The announcement, made by US Treasury Secretary Scott Bessent, revealed that both countries will slash tariffs by 115% during this timeframe. This agreement follows a series of intensive negotiations held in Switzerland over the weekend, marking the first official dialogue since President Donald Trump imposed heavy tariffs on Chinese imports earlier this year.

The situation unfolded following the imposition of a 145% tariff by the US on Chinese goods, to which China retaliated with a 125% tariff on certain US products. The new terms of the deal will see US tariffs on Chinese imports reduced to 30%, while Chinese tariffs on US goods will decrease to 10%. Notably, this arrangement still allows for continued pressure on China regarding the illegal trade in fentanyl, a potent opioid that has impacted both nations significantly.

The market responded favorably to this news, alleviating fears of a potential global recession that had loomed due to the earlier tariffs. Following the announcement, Hong Kong’s benchmark Hang Seng Index surged by 3%, while the Shanghai Composite Index noted a 0.8% rise before the details were released. European stock markets opened positively, and projections indicated a potential 2-3% increase for major US stock markets at the start of trading. This development highlights a temporary reprieve in trade tensions and opens the door for potential long-term solutions.