US and China Agree on 90-day reduction of Tariffs
- GMCCTradeteam
- May 12
- 2 min read
Updated: May 19
The United States and China have agreed to a 90-day reduction in tariffs, aiming to ease trade tensions between the world's two largest economies. Announced on the 12th May 2025, after negotiations in Geneva, the agreement marks a pivotal moment in their ongoing trade relations.
The announcement has positively impacted global markets, with major indices like the S&P 500 and Nasdaq experiencing significant gains. Both nations have expressed a commitment to continued dialogue, aiming for a more comprehensive and lasting trade agreement.
According to the White House, under this initial agreement, both US and China have agreed to lower tariffs by 115% for a 90-day period whilst negotiations continue. Although, tariffs related to the fentanyl trade will remain.
While this agreement represents a step toward de-escalation, underlying structural differences remain. The coming months will be crucial in determining whether this temporary truce can lead to a more permanent and comprehensive trade agreement.
Recap of what the agreement is for the next 90 days:
Tariff Pause: The U.S. agreed to suspend a planned increase in tariffs on $200 billion worth of Chinese goods (from 10% to 25%) for 90 days.
No New Tariffs: China and the U.S. both agreed not to impose any new tariffs during the 90-day negotiation period, aiming to work toward a more comprehensive agreement.
China’s Commitments: In exchange, China committed to increased purchases of U.S. goods, particularly in agriculture, energy, and industrial products.
Tariffs Remain in Place: Existing tariffs remained in effect during the 90 days — only new or escalated tariffs were paused, not rolled back.
Conditional Extension: The 90-day tariff truce was conditional on progress; if no meaningful agreement was reached, the U.S. warned it could proceed with higher tariffs afterward.
For more information about the US-China agreement for the next 90-days, visit the White House Fact Sheet Section
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Sources: The Guardian, Financial Times, The Wall Street Journal, White House
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