China and the United States are set to suspend sweeping tariffs on each other’s goods for a 90-day period starting Wednesday, following a breakthrough deal aimed at de-escalating one of the most punishing trade wars in recent history.
The agreement, which emerged over the weekend during high-level negotiations in Geneva, marks a rare moment of consensus between the world’s two largest economies after years of tit-for-tat tariff hikes that have disrupted global markets and strained supply chains.
Speaking to Fox News on Tuesday, US President Donald Trump hailed the deal as a significant step forward, describing it as a “very, very strong” framework that could pave the way for deeper market access in China for American businesses.
“We have the confines of a very, very strong deal with China,” Trump said aboard Air Force One, en route to the start of his Gulf tour. “What’s most exciting for both sides is that we’re trying to open up China.”
While details remain sparse, the US has agreed to reduce its tariffs on Chinese imports to 30 percent, a sharp drop from levels that previously reached as high as 245 percent. In return, Beijing will cut its own tariffs to 10 percent—down more than 100 percentage points in some cases.
The suspension will take effect just after midnight Washington time (0401 GMT) on Wednesday, offering a much-needed reprieve for businesses and investors shaken by the lengthy tariff standoff.
Markets responded positively to the announcement, with global equities climbing on the news.
‘No Winners in Trade Wars,’ Xi Warns
Chinese leaders have kept a more reserved tone, using a summit in Beijing with Latin American leaders to reinforce their stance as champions of globalisation. President Xi Jinping told attendees that “there are no winners in tariff wars or trade wars,” while Foreign Minister Wang Yi appeared to take a swipe at Washington, criticising a “major power” for believing that “might makes right.”
Despite the breakthrough, longstanding issues continue to cast a shadow over the agreement. One major sticking point is a 20 percent US tariff still in place over Trump’s allegations that China has failed to curb the export of chemicals used to make fentanyl—claims Beijing vehemently denies.
On Tuesday, Chinese officials urged Washington to “stop smearing and shifting blame,” highlighting the fragile nature of the ceasefire.
Uncertainty Lingers
While the 90-day pause has been welcomed by markets, analysts warn it may prove only a temporary fix.
“The risk of renewed escalation persists,” said Yue Su, Principal Economist at The Economist Intelligence Unit. “Further tariff reductions will be difficult.”
US businesses reliant on Chinese manufacturing remain wary, with many still reeling from the disruption caused by previous tariff hikes. Meanwhile, China’s economy continues to struggle with a property crisis and flagging consumer spending, both exacerbated by trade-related uncertainty.
“Both sides have endured a good deal of economic pain and they can still endure a little bit more,” said Dylan Loh, Assistant Professor at Nanyang Technological University in Singapore.
For now, the truce offers a brief pause in a protracted and economically bruising conflict—but with deep-rooted disagreements unresolved, the road ahead remains uncertain.