U.S., China Agree to Substantial Tariff Cuts
Futures surge after both sides slash tariffs, with more trade negotiations planned
Last Updated:
May 12, 2025 at 4:38 AM EDT
The U.S. and China said Monday they agreed to suspend most tariffs on each other's goods pending further negotiations, after weekend talks in Geneva.
President Trump's "reciprocal" tariff on China will fall to 10% from 125%.
A separate 20% tariff the president imposed over what he described as China's role in the fentanyl trade will remain.
Beijing will cut its retaliatory levies on U.S. goods to 10% from 125%.
The U.S. said the reductions would last for 90 days while the two sides begin further talks. These will be led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer on the U.S. side and by Vice Premier He Lifeng for China.
U.S. stock futures, which were higher ahead of the announcement, surged. Contracts tied to the tech-heavy Nasdaq-100 rose over 3%. The dollar jumped and bond yields rose.
Trade between the U.S. and China has practically dried up this year, after President Trump slapped hefty tariffs on Chinese goods and Beijing hit back with steep duties on American products.
The trade war has shaken businesses large and small that depend on China for goods and manufacturing. Surveys show U.S. households have grown much more nervous about the economy.
