Some “mutual” tariffs and obligations have been rewinded in favor of “mutually beneficial” lectures.
China and the US have agreed to suspend some of the heavy trade tariffs imposed on each other in preparation for extension of negotiations aimed at reducing trade war tensions.
The two countries issued a joint statement on Monday after two days of trade talks in Geneva, Switzerland. They explained the negotiations. It came after President Donald Trump’s nationalist agenda urged a more heavily duty spiral to be positive.
Global markets responded positively to the news, with stock markets in Hong Kong, the US and Europe rising.
In a statement, Beijing and Washington said they recognize the importance of bilateral economic and trade relations between the two countries and the world economy.
They said they would move forward “with a spirit of mutual openness, continuous communication, cooperation and mutual respect.”
As part of the agreement, the US will suspend an additional Valorem obligation rate (tax based on the value of the product) of around 24% over a 90-day “early” period. This will implement a 10% tariff rate.
China will reduce US import obligations at similar amounts and also retain 10% tariffs.
Washington also rolls back tariffs imposed by two executive orders signed by Trump in early April, affecting a wide range of US imports from China, including Hong Kong and Macau.
Beijing suspends the tariffs imposed accordingly and “suspends or removes non-tariff measures” taken against the United States.
The two largest economies of the world agreed to establish a mechanism to continue debate on economic and trade relations, and appointed officials to lead the consultation.
Deputy Prime Minister of the State Council He says that Lifeng will become China’s top negotiator. US Treasury Secretary Scott Bescent and trade representative Jamieson Greer will lead White House consultations.
“These discussions may take place on alternating basis in China and the US or in third countries at the time of agreement between the parties. If necessary, both parties may have working-level consultations on relevant economic and trade issues,” the joint statement reads.
“Both sides will move down mutual tariffs,” Bescent told reporters in Geneva that they will cut down by up to 115% on some goods after a successful meeting in which the two delegates “respectfully” each other.
“The consensus from both delegations does not want either side to separate,” Bescent said, adding that tariffs amounted to an embargo and that neither side preferred.
Global markets have fallen considerably amid the trade war launched by the Trump administration as uncertainty increased over the potential impact of tariffs.
However, there have been signs of pullbacks in recent weeks.
The agreement with China comes days after the US has reached a trade agreement framework that resets most of Washington’s tariffs on imports from the UK.
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