Source: The Straits Times; Bloomberg
Date: 12th May 2025

The United States and China will suspend part of their tariffs on their respective exports for 90 days, both countries said in a joint statement on May 12. This move will cool trade tensions and give the world’s two largest economies three more months to resolve their differences.

According to the statement and officials in a briefing on May 12, the combined 145 percent US levies on most Chinese imports will be reduced to 30 percent, including the rate tied to fentanyl, by May 14, while the 125 percent Chinese duties on US goods will drop to 10 percent.

Speaking after talks with Chinese officials in Geneva, the Treasury Secretary told reporters the two sides had reached a deal for a 90-day pause on measures and that reciprocal tariffs would come down by 115 percentage points.

“Both countries represented their national interest very well,” the Treasury Secretary said. “We both have an interest in balanced trade, the US will continue moving towards that.

“We had a very robust and productive discussion on steps forward on fentanyl,” the Treasury Secretary said. “We agree that neither side wants to decouple.”

China hailed “substantial progress” with the US after the crunch trade talks in Geneva.

“This move is in the interest of the two countries and the common interest of the world,” Beijing’s commerce ministry said, adding it hoped Washington would keep working with China “to correct the wrong practice of unilateral tariff rises”.

Both countries also pledged to establish a mechanism to continue discussions about economic and trade relations.

China will be represented at these discussions by the Vice-Premier, while the Treasury Secretary and the Trade Representative will represent the US.

The talks may be conducted in China, the US, or a third country.

The U.S. President slapped steep new levies on China in April, sparking a robust retaliation from Beijing.

The tariffs imposed by the U.S. President on the Asian manufacturing giant since the start of the year currently total 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent.

In retaliation, China put 125 percent tariffs on US goods.