Energy & Economics
China and US agree to cut tariffs imposed in April
Image Source : Shutterstock
by Abdul Rahman
First Published in: May.13,2025
May.19, 2025
Share Article
The agreement was an acknowledgment of the significance of their trade for mutual economic development and the health of the global economy, the joint statement says.
China and the US agreed to roll back high tariffs imposed on one another last month for a period of 90 days. The agreement was announced in a joint statement issued on Monday, May 12.
The agreement was a result of a high-level meeting on trade and economic affairs held between Chinese and US delegations in Geneva, Switzerland over the weekend.
As described in a press conference on Monday by the US Treasury Secretary Scott Bessent who was part of the US delegation, both sides have agreed to reduce the tariffs by 115%. That would mean that the US will reduce its tariffs on China to 30% from its present 145% while the Chinese will lower their tariffs to 10% from its present 125%.
These new tariff rates would be effective from Wednesday for the next 90 days. Both the countries also agreed to explore a more stable arrangement in the interim period.
China also agreed to reverse additional measures imposed in response to US President Donald Trump’s tariff war, such as putting various US companies on the sanctions list and placing export controls on rare earth minerals.
The parties committed to taking these measures as an acknowledgment of the mutual significance of their bilateral trade and its importance for the global economy and for “moving forward in the spirit of mutual opening, continued communication, cooperation and mutual respect,” a joint statement says.
The 30% US tariff includes a 10% baseline tariff imposed on all imports by Trump in April after suspending his reciprocal tariff regime for 90 days, and a 20% tariff imposed by the Trump administration before April in the name of stopping the illegal flow of the drug fentanyl.
Answering a question on the cooperation between both the countries over fentanyl, the spokesperson of the Chinese Foreign Ministry Lin Jian criticized “the wrongly slapped tariffs on Chinese imports” by citing the issue and claiming that “if the US truly wants to cooperate with China, it should stop vilifying and shifting the blame.” Jian also advised the US “to seek dialogue with China based on equality, respect and mutual benefit.”
Relief for the global economy
Trump announced a reciprocal tariff regime on April 2 against all those countries which had a trade surplus with the US, including China. After global backlash, Trump later postponed the implementation of the regime for 90 days, inviting countries to seek bilateral agreements to avoid high tariffs while imposing a 10% common tariff.
The Trump administration had claimed that reciprocal tariffs were required in order to lower the US trade deficit, which is over a trillion dollars.
China, the third largest trade partner of the US, faced the highest tariff rates under Trump’s tariff war and chose to retaliate. It also called the policy a violation of international law and an attempt by the US to weaponize trade.
On Tuesday, Chinese President Xi Jinping reiterated his country’s position that there are no winners in trade and tariff wars, claiming bullying and hegemony will only result in self-isolation. He was addressing the fourth ministerial meeting of the China-CELAC (Community of Latin American and Caribbean States) forum in Beijing.
The tariff war between the world’s leading economies was seen as a disaster for the global economy and trade. A large number of US businesses had also opposed Trump’s tariff war. They had claimed high tariffs may lead to a rise in prices which harm both the consumer and domestic production.
Several businesses filed lawsuits in the US claiming Trump’s reciprocal tariff regime was illegal and harmful for their ability to do business.
US trade representative Jamieson Greer, who was part of the negotiating team in Geneva, claimed that the talks with various countries, including China, is the first step to reducing the US trade deficit and ending the national emergency declared by Trump to authorize the reciprocal tariff decrees, South China Morning Post reported.
The Chinese Ministry of Commerce also hailed the agreement as “substantive progress” for mutual economic development. It expressed hope that “the US side will build on the meeting, continue to work with China in the same direction, completely rectify its wrong practices of unilateral tariff hikes, and keep strengthening mutually beneficial cooperation.”
Acknowledging that “high levels of tariffs were equivalent to an embargo and neither side wanted that,” Bessent declared on Monday that the US wants a trade relationship with China, though a balanced one.
The Chinese Ministry of Commerce also hoped that the US would pursue the matter much more seriously and “inject more certainty and stability into the world economy.”
Both the countries have agreed to establish “a joint mechanism” to continue their trade and economic negotiations in future.
Text under Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license
First published in :
Peoples Dispatch
Abdul Rahman
Peoples Dispatch colaborator
