While the United States agreed to lower tariffs on Chinese imports from 145% to 30%, China will reduce its tariffs on American goods from 125% to 10%
United States, China to slash tariffs in trade war de-escalation: The United States and China on Sunday (May 11) reached a significant agreement to de-escalate their ongoing trade war by substantially reducing tariffs and initiating a 90-day pause on new trade measures, media reports stated.
Key Terms of the Agreement
Tariff Reductions: The U.S. agreed to lower tariffs on Chinese imports from 145% to 30%, while China reduced its tariffs on U.S. goods from 125% to 10%.
90-Day Moratorium: Both nations committed to a 90-day suspension of new trade measures to facilitate further negotiations.
Establishment of a Dialogue Mechanism: A permanent platform for ongoing trade discussions was established to address unresolved issues and prevent future escalations.
Background:
The trade tensions intensified earlier in 2025 when the U.S. imposed tariffs up to 145% on Chinese goods, citing concerns over China’s role in the fentanyl crisis. China retaliated with 125% tariffs on U.S. products and restricted exports of critical rare earth elements. These actions disrupted approximately $600 billion in bilateral trade, affecting global markets and supply chains
Market Reaction:
Financial markets responded positively to the agreement. U.S. stock futures, particularly the tech-focused Nasdaq-100, surged, and the dollar strengthened. In Europe and Asia, indices like the DAX and CAC saw significant gains, especially in the mining and automotive sectors.
While this agreement marks a pivotal step towards resolving trade tensions, analysts caution that underlying issues remain unresolved, and further negotiations will be crucial for a lasting solution.
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