[GENEVA] The US and China will temporarily lower tariffs on each other’s products, according to a joint statement, in a move to cool trade tensions and give the world’s two largest economies three more months to resolve their differences.

The combined 145 per cent US levies on most Chinese imports will be reduced to 30 per cent including the rate tied to fentanyl by May 14, while the 125 per cent Chinese duties on US goods will drop to 10 per cent, according to the statement and officials in a briefing on Monday (May 12) in Geneva.

“We are in agreement that neither side wants to decouple,” Treasury Secretary Scott Bessent said, adding that “we had a very robust and productive discussion on steps forward on fentanyl” and that talks might lead to “purchasing agreements” by China.

Bessent added that the tariff reductions announced don’t apply to sectoral duties imposed on all US trading partners, and the tariffs applied on China during the first Trump administration remain in place. 

Equity markets in Asia and Europe rose after the announcement, and S&P 500 futures jumped 3 per cent. Oil prices increased, Treasury yields gained and the US dollar was stronger. The offshore yuan extended gains against the US dollar, rising about 0.5 per cent.

The US statement also said “the parties will establish a mechanism to continue discussions about economic and trade relations.”

China has always handled relations with the US based on the principles of mutual respect, the official Xinhua News Agency reported, citing a white paper on national security. China is committed to the stable development of relations with US, it said, ...