The United States and China have agreed to suspend most tariffs on each other’s goods, signaling a significant de-escalation in the trade tensions between the world’s two largest economies.
Under the agreement, reciprocal tariffs between the two countries will be reduced from 125% to 10%, a sharp decline aimed at restoring stability to global trade.
However, U.S. tariffs on Chinese imports related to fentanyl will remain at 20%, bringing the overall tariff rate on Chinese goods to 30%.
The breakthrough follows high-stakes negotiations over the weekend in Switzerland, where U.S. and Chinese trade representatives met to resolve their differences.
“We had very productive talks, and I believe the venue here in Lake Geneva added a sense of calm that contributed to the positive outcome,” U.S. Treasury Secretary Scott Bessent said at a news conference.
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“We have agreed to a 90-day pause and a substantial reduction in reciprocal tariffs, moving both sides down by 115%.”
Both countries also committed to ongoing discussions on broader economic and trade policy, setting the stage for potentially deeper cooperation in the months ahead.
The news of the tariff suspension lifted market sentiment, with Nasdaq futures rising 3.6%, S&P 500 futures climbing 2.8%, and the Dow Jones Industrial Average set to open nearly 1,000 points higher, or 2.3%.
The ICE U.S. Dollar Index, which tracks the dollar against a basket of global currencies, also jumped 1.3% to 101.63, reflecting the optimism among investors. Meanwhile, Europe’s Stoxx 600 index gained 0.7% in early trading, adding to the global market rally.
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