The United States and China will suspend part of their punitive customs duties for 90 days

By The New Obs with AFP

Published on May 12, 2025 at 9:24 a.m. , updated on May 12, 2025 at 10:41 a.m.

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The United States and China announced on Monday, May 12, that they would suspend most of the prohibitive customs duties they had imposed on each other for 90 days, marking a de-escalation in their trade war that has shaken the global economy.

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This suspension will take effect "by May 14," announced the two largest economic powers in the world in a joint statement published after two days of negotiations in Geneva, scrutinized by the entire world.

Concretely, the two camps agreed to suspend the 115 percentage point surcharges they had imposed on each other in recent weeks, as part of a bidding war initiated in April by Donald Trump, who denounced an unbalanced trade relationship in favor of China.

US tariffs at 30%

These decisions therefore temporarily reduce US customs duties on China to 30% and Chinese customs duties on the United States to 10%, while negotiations between the two countries continue, explained US Trade Representative Jamieson Greer at a press conference in Geneva.

The announcement of the truce immediately brought relief to financial markets, with the Hong Kong stock market, for example, jumping more than 3% within minutes of the joint statement being published. Meanwhile, the dollar, which had suffered from the trade war , recovered against the yen and the euro.

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"Neither side wants a dissociation" of their economies, said US Treasury Secretary Scott Bessent in Geneva on Monday. "We want a more balanced trade relationship," he added, arguing that the customs barriers put in place in recent months had effectively imposed an "embargo" on trade between the two countries.

The reduction of these customs duties is "in the common interest of the world," commented the Chinese Ministry of Commerce, welcoming "substantial progress" in trade negotiations with Washington.

The truce announced Monday is the result of two days of negotiations in Geneva between, on the American side, Scott Bessent and Jamieson Greer, and, on the Chinese side, Chinese Vice Premier He Lifeng.

The meeting was the first face-to-face meeting between senior officials from both countries since Donald Trump imposed a 145 percent tariff on goods from China in early April, on top of existing tariffs.

Beijing, which has promised to fight these surcharges "to the bitter end," retaliated with 125% tariffs on American products. The negotiations in Geneva took place with "great respect," and their outcome shows that "neither side wants an economic breakup," Scott Bessent said on Monday.

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Both countries "have an interest in having balanced trade, and that is what the United States will strive for," he added, calling on China to "open up to more American goods."

He Lifeng reported on Sunday "significant progress" after two days of talks that he described as "frank, in-depth and substantive." According to the joint statement, the two countries also agreed to "establish a mechanism to continue discussions on trade and economic relations."

As early as Sunday, the White House had welcomed what it called a new "trade agreement" with China, without providing further details. The trade war between Beijing and Washington has shaken global financial markets and fueled fears of inflation in the United States and an economic slowdown.

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"These discussions mark a significant step forward and, we hope, bode well for the future," World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala said on Sunday after meeting with He Lifeng. "This progress is important not only for the United States and China, but also for the rest of the world, especially the most vulnerable economies."

The negotiations took place behind closed doors at the residence of the Swiss representative to the United Nations, a luxurious villa nestled on the left bank of Lake Geneva. The meeting in Geneva came two days after Donald Trump unveiled a trade agreement with the United Kingdom, the first concluded since he imposed more or less prohibitive tariffs on all countries.

Le Nouvel Observateur

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