U.S. and China agree on reducing trade taxes
U.S. Treasury Secretary Scott Bessent and U.S. Trade Rep. Jamieson Greer are all smiles following a successful round of tariff talks with China in Geneva on May 12, 2025. The news is music to the ears of many, as it signals a significant step towards ending the ongoing tariff war between the two economic giants.
While the details are still being ironed out, it's clear that both countries have agreed to a 90-day suspension of most tariffs that have been imposed in recent months. China, for instance, will halt 24 percentage points of its additional ad valorem tariff rates on U.S. goods, keeping a 10% tariff in place. Moreover, China will rescind certain higher tariff announcements and put a halt to non-tariff countermeasures taken since April 2, 2025.
The U.S., for its part, has also agreed to relax tariffs, and both sides have pledged to create a mechanism to keep the dialogue on economic and trade relations going. The designated high-ranking officials leading these discussions will be He Lifeng, Vice Premier of the State Council from China, and U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer. These discussions may take place in China, the U.S., or a mutually agreed third country, with working-level consultations as necessary.
President Trump has enthusiastically endorsed this agreement, stressing that China has agreed to open up its markets. However, he also notes that the formal aspects of the agreement will take some time to iron out. The easing of tariffs and non-tariff barriers, including the potential resumption of rare earths exports critical for U.S. high-tech industries, suggests a substantial de-escalation of the trade conflict that had significantly impacted trade flows between the two economies.
In essence, following the May 12 Geneva meeting, U.S.-China tariff talks have resulted in a temporary but meaningful rollback of tariffs and a framework for continued negotiations aimed at resolving trade tensions. Fingers crossed that this is the beginning of a new era of cooperation between these two nations!
- The temporary suspension of tariffs, as agreed upon by both the U.S. and China, is expected to have a positive impact on various industries and businesses, particularly those heavily reliant on trade between the two economic giants.
- The easing of tariffs and non-tariff barriers, such as the potential resumption of rare earths exports, signifies a significant move in the economics and finance sector, potentially leading to increased investment and growth in U.S. high-tech industries.
- The ongoing political dialogue between the U.S. and China, as demonstrated by the tariff talks, also has broader implications for global politics and general news, as it sets a precedent for resolving economic and trade disputes between major nations.
- The successful May 12 tariff talks between the U.S. and China could mark a turning point in the long-standing business and trade relationship between the two nations, potentially leading to a more harmonious and cooperative economic environment in the future.
