U.S. has reached a trade deal with China, after big talks in Geneva, Switzerland. News of the deal broke on Sunday, following hours of discussions involving Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and Chinese officials.
Now the details have been released.
.@SecScottBessent: “We have reached an agreement on a 90-day pause and substantially moved down the tariff levels — both sides, on the reciprocal tariffs, will move their tariffs down 115%.” pic.twitter.com/Jxdd11U83s
— Rapid Response 47 (@RapidResponse47) May 12, 2025
CNBC: “Here in Geneva, we witnessed marathon talks over the last two days … and they’ve yielded a major breakthrough.”
pic.twitter.com/ZbqpUWsoj7
— Rapid Response 47 (@RapidResponse47) May 12, 2025
The tariffs President Donald Trump announced against China on April 2 are being cut by 24 percentage points for this temporary period while retaining the remaining ad valorem rate of 10% from that announcement, according to a joint statement.
China agreed to the same stipulations, adding that it will “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2,” the announcement stated.
Under the deal, reciprocal tariffs for both countries would be reduced by 115%. The U.S. will temporarily lower its tariffs on Chinese goods from 145% to 30%, and China will reduce its levies on American products from 125% to 10%.
Both the U.S. and China agreed to take the aforementioned actions by Wednesday.
On top of that, they have a “mechanism” to continue talks, with Bessent and Greer leading talks for the U.S.
I think it’s safe to say that’s going to drive the markets up, since the deal with China was potentially the most challenging of all the tariff deals. The Trump team managed to drive China to the table, and it looks like they’ve made good progress toward some change.
Bessent and Greer also said there was good movement on fentanyl as well.
.@SecScottBessent: “The upside surprise for me from this weekend was the level of Chinese engagement on the fentanyl crisis in the United States. They brought the Deputy Minister for Public Safety… and he had a very robust and highly detailed discussion.” pic.twitter.com/xcCc7gCddW
— Rapid Response 47 (@RapidResponse47) May 12, 2025
.@USTradeRep Ambassador Greer: “Both the Chinese and the United States agreed to work constructively together on fentanyl and there’s a positive path forward there as well.” pic.twitter.com/gsFMMNRmjW
— Rapid Response 47 (@RapidResponse47) May 12, 2025
I don’t think that was expected, so, on top of the other news, it sounds like great progress, given what a major problem fentanyl is.
Most importantly, Bessent explained the U.S. was addressing independence on critical supplies and now more balanced trade.
.@SecScottBessent: “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… We will… pic.twitter.com/ift5jLlBEZ
— Rapid Response 47 (@RapidResponse47) May 12, 2025
Bessent said they will continue to move on all these issues.
