The US and China agree to slash tariffs on each other’s goods for 90 days in a major de-escalation of their trade war.
US Treasury Secretary Scott Bessent says both sides will cut tariffs by 115% from Wednesday.
It means US tariffs on Chinese imports will fall to 30%, while Chinese tariffs on US goods will fall to 10%.
Reports say that although it is a bigger cut than expected, 30% is still a high tariff.
The breakthrough agreement comes after both sides held trade talks in Geneva over the weekend.
There is a sense of optimism from both sides after this weekend’s talks in Geneva, but there’s a lot of work to be done.
The 90-day tariff suspensions give the US and China more time to make progress, however, the list of US complaints is long.
President Trump has long been unhappy with the fact that the US buys substantially more goods from China than it sells it.
Other concerns include a lack of protection for the intellectual property rights of American companies in China, including the forced transfer of technology.
There’s also unhappiness about alleged Chinese government subsidies that give their companies an unfair advantage – something China says the US government also does.
And in some industries, like steel and aluminium production, those subsidies are argued to support excess manufacturing, which drives global prices down; Beijing has also dismissed that argument.
Plus, there are disagreements over regulations in industries ranging from food to cosmetics.
These differences have been years in the making, so it’s difficult to see how all of them can be resolved by August, but substantial progress would certainly ease tensions.
Punch/Oluwayemisi Owonikoko
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