US and China Reach Agreement to Reduce Tariffs in Landmark Deal

AFP

US Treasury Secretary and US Trade Representative address the media after trade talks between US and

In a significant breakthrough, the United States and China have agreed to substantially reduce the tariffs imposed during their protracted trade dispute. Announced on 12 May 2025, the agreement represents a key step in easing tensions between the two economic powerhouses.

As part of the deal, both countries will lower tariffs on each other's goods, cutting rates that were previously as high as 125% down to a more moderate 10%. This decision aims to alleviate the economic burden caused by years of punitive trade measures. However, certain tariffs will remain in place, particularly those concerning sensitive issues such as fentanyl.

Additionally, the agreement includes a 90-day pause on the imposition of new tariffs, allowing both nations time to continue negotiations and address ongoing trade disputes. This announcement follows two days of constructive high-level talks in Geneva, as described by officials from both sides.

Global markets have responded positively, with stock prices in the Asia-Pacific region rising and commodities like oil and iron ore seeing gains. Investors are optimistic that this agreement will help stabilise the global economy and improve international trade relations.

The tariff rollback signals a potential shift towards more cooperative trade relations between the US and China, with far-reaching consequences for the global economy.



PUKMEDIA