US to cut tariffs on Chinese goods to 30 per cent

US Treasury Secretary Scott Bessent (right) and US Trade Representative Jamieson Greer at a news conference in Geneva yesterday to announce the tariff decision. PIC/AFP

The US and China have arrived at an agreement that they will withdraw their previously announced reciprocal tariffs and counter tariffs for an initial period of 90 days. In the meantime, China will impose 10 per cent tariffs on US goods, and the US will tax Chinese goods at about 30 per cent.

The understanding was arrived at recognising the importance of their bilateral economic and trade relationship to both countries and the global economy, as per a joint statement on Monday. Both countries recognised the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship.

Both countries reflected on their recent discussions and believed that continued discussions have the potential to address each side's concerns in their economic and trade relationship. Going ahead, the two countries will establish a mechanism to continue discussions about economic and trade relations.

The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the US side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative.

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The World Reacts

Stocks and the dollar surged on Monday after the United States and China said they had agreed on a 90-day pause on tariffs and reciprocal duties would drop sharply, giving investors some confidence that a full-scale trade war may have been averted.

Wind turbine blades waiting to be loaded onto a ship for export at the port in Lianyungang, in China. PIC/AFP

Jens Eskelund, president, European Union Chamber of Commerce in China

‘The tariffs only were suspended for 90 days and there is great uncertainty over what lies ahead. Businesses need predictability to maintain normal operations and make investment decisions. The chamber therefore hopes to see both sides continue to engage in dialogue to resolve differences, and avoid taking measures that will disrupt global trade and result in collateral damage for those caught in the crossfire'

Simon Edelsten, fund manager, Goshawk Asset Management, London

‘It's no surprise that the world's two largest economies are trying to address their long-standing issues, but don't expect an easy resolution. Even if quite modest tariffs remain, that could make a large difference to trade flows as many Chinese exports to the US are low-margin and price sensitive'

Mark Williams, chief Asia economist at Capital Economics

‘This is a substantial de-escalation. But, there is no guarantee that the 90-day truce will give way to a lasting ceasefire'

Jan Von Gerich, chief market analyst, Nordea, Helsinki

‘Markets have taken it at face value, I personally am a bit sceptical, if you want to end up with low tariffs then why do it like this? It's still bouncy, and uncertainty is elevated'

Zhiwei Zhang, chief economist, Pinpoint Asset Management, Hong Kong

‘Obviously, this is very positive news for economies in both countries and for the global economy, and makes investors much less concerned about the damage to global supply chains in the short term. But we also need to keep in mind this is only a three-month temporary reduction of tariffs. So this is the beginning of a long process'

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