US Treasury Secretary Scott Bessent (L) and US Trade Representative Jamieson Greer speak to the media after trade ntalks concluded between senior US and Chinese officials on May 11, 2025.

The United States and China agreed Monday to drastically roll back tariffs on each other’s goods for an initial 90-day period, in a surprise breakthrough that has de-escalated a punishing trade war and buoyed global markets.

The announcement, which was made in a joint statement, comes after a weekend of marathon trade negotiations in Geneva, Switzerland by officials from the world’s two largest economies, during which both sides touted “substantial progress.”

Both sides recognize “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship,” they said in the statement.

The tariff revisions will be imposed by May 14. US President Donald Trump’s 20% fentanyl-related levies on China, imposed in February and March, will stay. However, each side has agreed to lower “reciprocal” tariffs on the other by 115 percentage points for 90 days.

That effectively means the US will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%, according to the joint statement.

The two sides also agreed to establish “a mechanism to continue discussions about economic and trade relations,” led by Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, it said.

“These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues,” it added.

Speaking at a Monday press conference in Geneva, Bessent said: “The consensus from both delegations is neither side wants to be decoupled, and what have occurred with these very high tariffs…was an equivalent of an embargo, and neither side wants that. We do want trade. We want more balance in trade. And I think both sides are committed to achieving that.”

Global investors are cheering a thaw in the trade war sparked by US President Donald Trump’s massive tariffs, which have roiled financial markets, disrupted supply chains and stoked recession fears.

Dow futures jumped more than 2%, while S&P 500 futures rose nearly 3%, and the tech-heavy Nasdaq Composite futures went up more than 3.5% during Asian afternoon trading. Asian markets were higher too, with Hong Kong’s Hang Seng index gaining more than 3%.

This is a developing story and will be updated.