The agreement follows two days of negotiations in Geneva between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng.
Under the terms of the deal, the US will lower tariffs on Chinese imports from 145% to 30%, while China will reduce its tariffs on US goods from 125% to 10%. Certain sector-specific tariffs, including those related to fentanyl, will remain in place.
Bessent described the talks as “productive and constructive,” emphasising the mutual interest in achieving balanced trade and avoiding economic decoupling. The agreement includes the establishment of a new trade consultation mechanism aimed at preventing future escalations.
Previously, Washington expressed optimism at the end of a weekend of trade talks with China aimed to de-escalate trade tensions sparked by President Donald Trump’s aggressive tariff rollout.
“I’m happy to report that we’ve made substantial progress between the United States and China in the very important trade talks,” US Treasury Secretary Scott Bessent told reporters in Geneva.
“The talks were productive,” he said, taking no questions from the media, but promising a “complete briefing” on the outcome of the talks on Monday.
Trade Representative Jamieson Greer, who also took part in the two days of closed-door talks with Chinese Vice Premier He Lifeng, said that the differences between the sides were “not so large as maybe thought”.
After the first day of negotiations, Trump had posted on Truth Social that the discussions had been “very good”, describing them as “a total reset negotiated in a friendly, but constructive, manner”. Beijing had yet to comment Sunday, but on Saturday Chinese state news agency Xinhua described the talks as “an important step in promoting the resolution of the issue”.
The Chinese delegation was expected to speak to the media Sunday evening.
The meetings marked the first time senior officials from the world’s two largest economies have met face-to-face to tackle the topic of trade since Trump slapped steep new levies on China last month, sparking a robust retaliation from Beijing.
“The talks reflect that the current state of the trade relations with these extremely high tariffs is ultimately in the interests of neither the United States nor China,”, Citigroup global chief economist Nathan Sheets told AFP. He called the tariffs a “lose-lose proposition”.
The tariffs imposed by Trump on the Asian manufacturing giant since the start of the year currently total 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent.
In retaliation, China put 125-percent tariffs on US goods. Ahead of the meeting at the discrete villa residence of the Swiss ambassador to the United Nations in Geneva, Trump signalled he might lower the tariffs, suggesting on social media that an “80% Tariff on China seems right!”
However, his press secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally. China would also need to make concessions, she said.