The United States and China announced Monday a temporary rollback of harsh tariffs that were recently imposed, signaling a pause in trade tensions while both sides pursue broader negotiations. The agreement, reached after high-level meetings in Switzerland over the weekend, reduces the U.S.’s 125% tariff on Chinese goods to 10%, while maintaining a 20% tariff on fentanyl-related imports. China will also reduce its retaliatory tariffs from 125% to 10%. The new rates are expected to take effect by May 14.
The breakthrough came after a series of discussions between U.S. Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and Chinese Vice Premier He Lifeng. Both countries issued a joint statement noting the formation of a new mechanism for continued trade discussions, with future meetings likely to alternate between China, the United States, and potentially third countries.
Bessent emphasized that the U.S. remains committed to securing independence in strategic sectors such as medicine, semiconductors, and steel — areas that were shown to be vulnerable during the COVID-19 pandemic. “We will continue moving toward U.S. independence or reliable supplies from allies,” he said. Despite the hardline rhetoric, he also noted that neither side wants a full decoupling of their economies.
Criticism was directed at the Biden administration for not enforcing previous agreements. Bessent claimed that a strong U.S.-China trade agreement had been in place, but was effectively ignored by Beijing once President Biden took office. “The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations,” Bessent said in a separate interview.
Fentanyl was another key topic. Greer stated that both countries committed to working constructively on the issue. He also pointed out that the presence of China’s Deputy Minister for Public Safety — not typically part of trade negotiations — marked a shift in the seriousness of the talks, especially regarding drug enforcement. Bessent described the fentanyl discussions as “robust and highly detailed.”
Financial markets reacted positively to the news. Global stock markets surged and U.S. stock futures rose in anticipation of a potential easing of trade costs and a more stable economic relationship between the two nations.
While the 90-day tariff reduction provides immediate relief, it also highlights the broader challenges still at play — from enforcing trade agreements to confronting the flow of fentanyl into the United States. The Biden administration now faces pressure not only to maintain strong economic positions but also to ensure accountability and follow-through in dealings with China.
