U.S. and China Reach a Breakthrough Agreement on Tariffs, Here's What Both Sides Agreed To

The U.S. and China have agreed to a 90-day pause in their escalating trade war, temporarily slashing tariffs and signaling renewed cooperation. Global markets responded with sharp gains, offering hope for American workers and businesses.

Key Facts:

Both countries agreed to reduce key tariffs for 90 days, starting Wednesday.
The U.S. will roll back tariffs on Chinese imports from 145% to 30%, suspending a 34% hike imposed April 2, 2025.
China will drop retaliatory tariffs announced since April 4, cutting rates from 125% to 10% during the pause.
Senior negotiators—including Treasury Secretary Scott Bessent and Vice Premier He Lifeng—will lead future talks.
Markets surged on the news: S&P futures rose 3%, Nasdaq futures 4%, and the dollar strengthened.

The Rest of The Story:

The United States and China issued a joint statement early Monday announcing a temporary tariff reduction.

The move is meant to ease trade tensions that had spiked in recent months, as both countries imposed steep duties on each other’s goods.

The deal slashes U.S. tariffs on Chinese goods from 145% to 30% and suspends a 34% reciprocal tariff for 90 days.

China is following suit by lowering its tariff on U.S. imports from 125% to 10%.

Both sides agreed to keep a baseline 10% tariff in place during negotiations.

The statement also outlined a framework for continued high-level talks.

These discussions will alternate between countries and focus on trade imbalances, manufacturing, and the flow of fentanyl precursors.

The U.S. had a $295 billion trade deficit with China in 2024, the largest with any nation.

The US and China have reached a trade agreement on a 90-day pause:

Both countries will cut tariffs by 115%

US: 145% ➡️ 30%
China: 125% ➡️ 10%

Bessent the Benevolent!pic.twitter.com/ChaBeTTX4E

— Geiger Capital (@Geiger_Capital) May 12, 2025

Commentary:

This deal is a validation of President Trump’s hard-nosed approach to trade.

The media warned for months that his tariffs would crash the economy, yet here we are—stocks are soaring, confidence is returning, and America is leading again.

Trump didn’t blink.

Instead of caving to pressure, he doubled down with reciprocal tariffs, forcing China to the negotiating table.

This move has begun correcting the massive trade imbalance and is already producing results that benefit American workers and businesses.

The decision to retain a 10% tariff even during the pause is smart.

It gives American manufacturers a cushion and helps bring supply chains back home.

That baseline tariff isn’t just symbolic—it sets the tone for a new era of fair trade.

The media won’t give Trump credit, but the numbers speak for themselves.

Markets are up, the dollar is strengthening, and investors are rotating out of safe havens and back into equities.

The data shows a clear vote of confidence in the direction of U.S. trade policy.

The inclusion of fentanyl enforcement in these talks also demonstrates how interconnected national security and trade really are.

By tackling both at once, the administration is showing it can walk and chew gum at the same time.

Of course, the road ahead won’t be easy.

Negotiations must address longstanding issues, including intellectual property theft and forced technology transfers.

But with this truce, the U.S. has the upper hand—and a real shot at a better deal.

The Bottom Line:

The U.S.-China tariff pause is a major step toward stabilizing the global economy and restoring fairness in trade.

President Trump’s strategy is working, despite relentless criticism.

Markets are reacting with optimism, and for good reason.

If this momentum continues, the U.S. may finally secure a trade framework that puts American interests first.

U.S. and China Reach a Breakthrough Agreement on Tariffs, Here’s What Both Sides Agreed To

Key Facts:

The Rest of The Story:

Commentary:

The Bottom Line:

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