In brief
The US and China have reached a temporary agreement to reduce tariffs on each other's imports for 90 days, following productive trade talks in Switzerland.
In a surprising turn of events, the US and China have decided to lower the tariffs they charge each other on imports for a limited time. US Treasury Secretary Scott Bessent shared that both nations will cut their tariffs by 115% for the next 90 days. This decision comes on the heels of trade discussions held in Switzerland, which were described by Bessent as "productive and constructive." This is the first time the two countries have engaged in talks since US President Donald Trump introduced steep tariffs on Chinese goods in January. For context, Trump had set a hefty 145% tariff on Chinese imports, prompting Beijing to impose a 125% tariff on select US products in retaliation. The stark rise in tariffs had stirred chaos in global financial markets, raising concerns about a potential worldwide recession.Thanks to this new agreement, the US’s tariffs on Chinese imports will decrease to 30%, while China will lower its tariffs on US imports to 10%, both effective for 90 days. This breakthrough in the ongoing trade conflict may provide a much-needed respite for the global economy.
