Geneva- 15 May 2025 : The US-China tariff truce has paused a fast-escalating trade war. On Monday, both countries agreed to slash tariffs for 90 days. This decision follows intense talks in Geneva.
The US will cut tariffs on Chinese imports from 145% to 30%. China will reduce duties on US goods from 125% to 10%. The truce surprised analysts and calmed markets. Nasdaq rose 4.3% as investors responded to the news.
Who made the bigger concession?
Despite tough talk, the US appeared to yield first. Treasury Secretary Scott Bessent said the US would “strategically decouple” in critical areas like semiconductors and medicine. However, Washington dropped several key tariffs, including a planned hike on low-cost e-commerce items from Temu and Shein.
China, on the other hand, agreed to suspend export restrictions but held firm on larger demands. It did not address the trade surplus or currency manipulation concerns raised by Washington.
Economist Piergiuseppe Fortunato believes the US acted out of economic necessity. Inflation was rising, and a recession loomed. “America’s economy is more fragile,” he said. Meanwhile, China’s exports jumped 8.2% in April.
Temporary relief, long-term questions
The tariff pause will last 90 days. During this period, both sides will continue negotiations. The White House hinted at new “purchase agreements.” But similar deals in 2020 hurt the US job market.
Fortunato warned that the final tariff rate could settle at 15–20%. That’s much higher than pre-war levels. While the truce brings temporary relief, risks remain.
For now, the world watches closely as the US-China tariff truce offers a brief reprieve from rising economic tensions, providing global markets a momentary sigh of relief and allowing businesses to cautiously resume cross-border operations. This temporary pause in hostilities has injected a sense of optimism into the international trade environment, yet the underlying issues—ranging from intellectual property disputes to technology transfers and geopolitical rivalry—remain far from resolved. As both economic giants tread a delicate path toward potential long-term agreement, investors, governments, and industries across the globe remain vigilant, recognizing that any misstep could reignite trade hostilities and once again disrupt the fragile balance of the global economy.
