On Monday, the U.S. and China agreed to suspend the exorbitant retaliatory tariffs imposed on each other in the ongoing trade war between the two countries following positive talks in Switzerland.

In a joint statement on Monday, the two countries announced that they would suspend the respective tariffs on each other for 90 days to give room for further negotiations, with China agreeing to lower its import duty on American goods to 10 per cent from 125 per cent.

On its end, the United States would reduce the tariff on Chinese imports to 30 per cent from its current 145 per cent, marking a significant progress in restoring trade relations between them, which had broken down in April following President Donald Trump’s imposition of ‘Liberation Day’ reciprocal tariffs on almost every country including China. 

“The United States will modify the application of the additional ad valorem rate of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of April 2, 2025, by suspending 24 percentage points of that rate for an initial period of 90 days,” the White House said in a statement.

The White House added, “China will modify accordingly the application of the additional ad valorem rate of duty on articles of the United States set forth in Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025, by suspending 24 percentage points of that rate for an initial period of 90 days.”

Both countries reached the latest agreement after top economic officials from the United States and China met in Geneva, Switzerland, over the weekend to discuss the situation.

“We concluded that we have a shared interest,” Treasury Secretary Scott Bessent said at a news conference in Geneva. “The consensus from both delegations is that neither side wanted a decoupling.”