The United States and China announced on Monday, May 12th, that they agreed to drastically reduce tit-for-tat tariffs for 90 days, de-escalating a trade war that has roiled financial markets and raised fears of a global economic downturn.
U.S. President Donald Trump had imposed duties of 145% on imports for China last month— compared to 10% for other countries in the global tariff blitz he launched last month.
Beijing hit back with duties of 125% on U.S. goods.
U.S. Treasury Secretary Scott Bessent said the two sides agreed to reduce those tariffs by 115 percentage points, taking U.S. tariffs to 30% and those by China to 10%.
In their statement, the two sides agreed to “establish a mechanism to continue discussions about economic and trade relations.”
The dollar, which tumbled after Trump launched his tariff blitz in April, rallied on the news while U.S. stock futures soared. European and Asian markets also rallied.
