Washington/Beijing – May 15, 2025
In a significant de-escalation of ongoing trade tensions, the United States and China have agreed to slash reciprocal tariffs to 10% for a 90-day period, offering a much-needed breather in a conflict that has roiled global markets and rattled businesses on both sides of the Pacific.
The temporary reprieve was announced late Wednesday after several days of intense negotiations between top U.S. and Chinese trade officials. Both sides hailed the decision as a constructive step forward, though they acknowledged that major issues remain unresolved.
What’s Changing
Starting next week, the U.S. will reduce tariffs on approximately $300 billion worth of Chinese goods from rates as high as 25% down to 10%. In return, China will make a similar move, lowering its tariffs on a broad range of American exports including automobiles, agricultural goods, and semiconductors.
The tariff cuts are part of a broader effort to reset the tone of trade talks and create room for more meaningful progress over the next three months.
Why It Matters
The announcement immediately lifted investor sentiment, with stock markets in both countries reacting positively. The Dow Jones closed up 400 points on the news, while Shanghai’s benchmark index posted its strongest daily gain in over a month.
“This 90-day pause doesn’t end the trade war, but it gives us the breathing room we need to work out deeper structural issues,” said U.S. Trade Representative Katherine Tai. “We’re not declaring victory—but we’re moving in the right direction.”
Chinese Vice Premier Liu He echoed that sentiment, calling the agreement a “constructive gesture” and expressing optimism that it could lead to more permanent resolutions.
What’s Next
The next round of high-level negotiations is expected to take place in Washington in early June. Key points on the agenda will include intellectual property rights, technology transfer practices, and enforcement mechanisms.
Analysts say the outcome of those talks will be critical. “This is a window of opportunity,” said Mei Zhang, a trade policy expert at Tsinghua University. “If the two sides can maintain momentum and rebuild trust, we could be looking at the beginning of a more stable phase in US-China trade relations.”
Bottom Line
While the road ahead remains uncertain, the tariff cut signals a rare moment of cooperation between the world’s two largest economies. For businesses and consumers weary of rising costs and uncertainty, that’s welcome news—at least for now.
Your message must be between 20-3,000 characters!
