US, China agree to bring down reciprocal tariffs by 115% for 90 days

Amid ongoing discussions regarding a trade agreement, the United States and China have jointly declared a 90-day pause on a portion of their existing tariffs, as outlined in a statement released by both countries.

In a media address, US Treasury Secretary Scott Bessent said the two countries had agreed not only to a temporary suspension but also to a notable reduction in current tariff levels. According to Bessent, the tariff cuts will be reciprocal, with each side reducing rates by 115 per cent.

During this 90-day window, the US will lower its tariffs on Chinese goods from 145 percent to 30 per cent. In a similar move, China will bring down tariffs on American imports from 125 per cent to 10 per cent.

"We have reached an agreement on a 90-day pause and substantially moved down the tariff levels." He characterised the talks with Chinese officials as productive and emphasised that "both sides showed great respect," Bessent said.

US Trade Representative hints at swift trade agreement

US Trade Representative Jamieson Greer said, "It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as far as maybe thought."

Greer said one of the Trump administration’s main goals is to reduce the trade gap with China, which reached a record $263 billion the previous year. “We’re confident that the deal we struck with our Chinese partners will help us to resolve, work towards resolving that national emergency,” he said.

A joint statement issued by US and China read, "The parties commit to take the following actions by May 14, 2025: The United States will (i) modify the application of the additional ad valorem rate of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of April 2, 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10 per cent on those articles pursuant to the terms of said Order..."

The statement further said, "China will (i) modify accordingly the application of the additional ad valorem rate of duty on articles of the United States set forth in Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining additional ad valorem rate of 10 per cent on those articles, and removing the modified additional ad valorem rates of duty on those articles imposed by Announcement of the Customs Tariff Commission of the State Council No. 5 of 2025 and Announcement of the Customs Tariff Commission of the State Council No. 6 of 2025; and (ii) adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025."

US-China tariff war

Since assuming office in January, Donald Trump has increased tariffs on US imports from China to 145 per cent, building on the levies he had introduced during his previous term and those later implemented by the Biden administration.

In response, China imposed restrictions on the export of certain rare earth minerals — crucial for American defence and consumer electronics industries — and raised tariffs on US products to 125 per cent.

This escalating trade conflict effectively froze close to $600 billion in bilateral trade, disrupted global supply chains, raised concerns over stagflation, and led to some job losses, Reuters reported.