US and China Agree to Suspend Tariffs

The United States and China have agreed to suspend significant portions of tariffs on each other’s goods and establish a consultation mechanism to address trade disputes, following high-level talks in Geneva on May 10–11, 2025. The agreement, effective by May 14, 2025, aims to de-escalate a trade war that has disrupted global markets, tariff reductions to 30% for the US and 10% for China during the 90-day suspension period.

Under the terms of the agreement, the US will suspend a 24% ad valorem tariff on Chinese goods, including those from Hong Kong and Macau, for an initial 90 days, while maintaining a 10% tariff as per Executive Order No. 14257 of April 2, 2025. The US will also cancel additional tariffs imposed under Executive Orders No. 14259 (April 8, 2025) and No. 14266 (April 9, 2025). China will mirror this by suspending a 24% tariff on US goods for 90 days, retaining a 10% tariff, and canceling tariffs outlined in Tariff Commission Announcements No. 5 and No. 6 of 2025. China will also pause or cancel non-tariff countermeasures against the US implemented since April 2, 2025.

The agreement establishes a trade consultation mechanism to address ongoing economic and trade issues. Chinese Vice Premier He Lifeng will lead China’s delegation, while US Treasury Secretary Scott Bessent and US Trade Representative Jamison Greer will represent the US. Consultations may occur in China, the US, or a mutually agreed third country, with working-level discussions as needed.

The trade war, intensified in 2025 under the second Trump administration, saw US tariffs on Chinese goods reach 145% and Chinese tariffs on US goods hit 125% by April, according to the Peterson Institute for International Economics. These measures led to a projected 75–80% drop in US imports from China in the second half of 2025 and a US GDP contraction in Q1 2025. The temporary tariff suspensions have sparked cautious optimism, with US stocks rising after earlier volatility.