US and China Agree to Significantly Cut Tariffs for 90 Days

By Jim Pytell, Managing Editor On May 12, 2025

The US and China have agreed to significantly lower the tariffs imposed on each other for 90 days in what President Donald Trump described as a “total reset with China” after two days of talks in Switzerland between the world’s two largest economies.

The combined US tariff rate on Chinese imports will be cut to 30% from 145% (this includes the 20% fentanyl-related tariff from the US, which remains in place), while China’s levies on US imports will be cut to 10% from 125%, the countries announced. 

China has also halted other non-tariff countermeasures, such as export control of critical minerals to the US, which it put in place in response to the initial tariff announcement last month.

Global stock markets rallied sharply on Monday after the tariff pause was announced, with the S&P 500 rising 3.26%, the Dow Jones Industrial Average raising 2.81% (more than 1,100 points), and The Nasdaq Composite, which led gains, surging 4.35%.

President Trump said today at the White House that he plans to talk with Chinese President Xi Jinping soon, potentially by the end of this week, in an effort to reach a permanent trade deal.

“Neither side wants a decoupling,” said Treasury Secretary Scott Bessent, who added that, “as long as there is good faith effort, engagement, and constructive dialogue, then we will keep moving forward.”

To access more business news, visit NJB News Now.

Related Articles: