Callum Sutherland and Nik Popli
The U.S. and China agreed on Monday to significantly reduce tariffs on each other for an initial 90-day period in a major breakthrough in the trade war between the world’s two largest economies.
Coming into effect on Wednesday, May 14, both countries will reduce tariffs on the other by 115% for that initial period, according to U.S. Treasury Secretary Scott Bessent. That effectively means that U.S. tariffs on Chinese exports will come down to 30%, while Chinese tariffs on American goods will climb down to 10%.
The higher U.S. rate is because 20% tariffs applied in February and March, which President Donald Trump said was in response to the flow of fentanyl, will remain in effect.
“They’ll be rewarded by not having to pay hundreds of billions of dollars in tariffs, so the fentanyl should stop," Trump told reporters after the announcement, adding that he intended to speak to President Xi this week.
"There's a big incentive for China to stop and I take them at their word they're going to work on that, I think, very hard."
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