US, China sign agreement to slash tariffs in trade war de-escalation

The United States and China announced on Monday an agreement to drastically reduce tit-for-tat tariffs for 90 days, sending financial markets soaring after weeks of turmoil over fears about their impact on the global economy.

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After their first talks since US President Donald Trump launched his trade war, the world’s two biggest economies agreed in a joint statement to bring their triple-digit tariffs down to two figures and continue negotiations.

Stock markets, which tumbled after Trump unleashed global tariffs, rallied on the announcement with major Wall Street indexes rocketing early Monday. The broad-based S&P 500 surged 3.0 per cent.

US Treasury Secretary Scott Bessent described weekend discussions with Chinese Vice Premier He Lifeng and international trade representative Li Chenggang as “productive” and “robust” with both sides anticipated to meet again soon.

“Both sides showed great respect,” Bessent told reporters.

Trump's fresh duties on many imports from China came up to 45 percent this year, compared to 10 percent for other countries in the global tariff blitz he launched last month.

Beijing hit back with duties of 125 per cent on US goods.

The United States agreed to lower its tariffs on Chinese goods to 30 per cent while China will reduce its own to 10 per cent.

Bessent told CNBC Monday that he expects United States and Chinese representatives to meet again in the coming weeks to work out “a more fulsome agreement.”