China, US temporarily slash tariffs to 10 percent in key trade truce

By MLex Staff ( May 12, 2025, 09:46 GMT | Insight) -- China and the US have agreed to substantially reduce tariff rates over a 90-day period in their first round of trade negotiations, a significant development that has reignited optimism in global markets. In a joint statement following trade talks in Switzerland over the weekend, the two countries said they will maintain only a 10 percent tariff on each other for 90 days starting May 14 — much lower than previously scaled out by US President Donald Trump last Friday.China and the US have agreed to substantially reduce tariff rates over a 90-day period in their first round of trade negotiations, a significant development that has reignited optimism in global markets. In a joint statement following trade talks in Switzerland over the weekend, the two countries said they will maintain only a 10 percent tariff on each other for 90 days starting May 14 — much lower than previously scaled out by US President Donald Trump last Friday (see here). To achieve this, the US will amend its April 2 reciprocal tariffs administrative order that had imposed a 34 percent tariff on Chinese imports and reduce the rate to 10 percent. It will also cancel the subsequent order raising this tariff to 125 percent. In parallel, China confirmed it will impose only a 10 percent tariff on US goods and similarly put a 90‑day hold on additional tariffs. It will also eliminate other retaliatory tariffs in this tit-for-tat tariff war. As a further commitment to de-escalating tensions, China vowed to undertake all necessary administrative measures to suspend or remove non‑tariff countermeasures targeting the US that have been announced since April 2. The joint statement also announced the establishment of a new mechanism for ongoing economic and trade discussions. The dialogue will be co-led by China's Vice Premier He Lifeng, US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. “As required, the two sides may conduct working‑level consultations on relevant economic and trade issues,” the statement added. World Trade Organization Director‑General Ngozi Okonjo-Iweala welcomed the breakthrough, emphasizing in a statement that the progress is important not only for China and the US but also for other nations, particularly those with vulnerable economies, amid growing global uncertainties. It was reported that China's minister of public security, Wang Xiaohong, also participated in the talks to address issues related to fentanyl. Trump had previously imposed a 20-percent punitive tariff on China, accusing it of failing to control the outflow of fentanyl precursors. That tariff was not waived under the current agreement. The agreed-upon 10-percent reciprocal tariff is the same rate that the UK, a longtime US ally, is subject to. The two countries also made progress in trade talks last week, setting an example for other countries trying to negotiate with the US. An opinion piece in the Chinese media outlet People's Daily last week suggested that further rounds of talks are likely, noting: “It is unrealistic to expect all issues will be resolved in one or two rounds of negotiations. China is fully aware of the complexities involved.”— Analysis by Emily Liu....