Significant Agreement Reached Between Two Economic Powerhouses
The United States and China announced a groundbreaking deal on Monday to cut reciprocal tariffs and halt new trade measures for 90 days. This move marks a major de-escalation in the ongoing trade war that has had far-reaching effects on the global economy and financial markets.
Speaking after high-level discussions with Chinese officials in Geneva, U.S. Treasury Secretary Scott Bessent revealed that both countries have agreed to reduce tariffs by over 100 percentage points to 10%. "Both countries represented their national interest very well," Bessent stated. "We both have a vested interest in achieving balanced trade, and the U.S. is committed to working towards that goal."
Bessent was joined by U.S. Trade Representative Jamieson Greer at the talks, where progress was hailed in bridging economic disparities between the two nations. These meetings in Geneva marked the first face-to-face engagement between senior U.S. and Chinese economic officials since President Donald Trump resumed office and initiated a global tariff campaign targeting China.
Following Trump's lead, the Biden administration had continued to escalate tariffs on Chinese goods, leading to a staggering 145% increase. In response, China retaliated by raising tariffs on U.S. imports to 125% and imposing export restrictions on rare earth elements critical to American industries.
This prolonged trade dispute brought bilateral trade amounting to nearly $600 billion to a virtual standstill, causing disruptions in supply chains, job losses, and concerns about stagflation. However, Monday's announcement has brought a sense of hope to Wall Street, with stock futures rising and the U.S. dollar strengthening against safe-haven currencies.
