In a Joint Statement released early Monday following weekend negotiations in Geneva, the United States and China announced mutual commitments to pause the tariffs applicable to each other’s goods. The parties committed to enact the cuts by May 14 for an initial period of 90 days and to “establish a mechanism to continue discussions about economic and trade relations.”
The United States will reduce its so-called reciprocal tariffs from 125% to 10%, the same “baseline” tariff that applies to good of most countries. The United States’ fentanyl tariffs of 20% will remain in place. This means that Chinese goods not subject to sector-specific tariffs, such as those applicable to steel and aluminum and automobiles and automotive parts, will be subject to 30% tariffs, plus any applicable Section 301 tariffs. Goods subject to sector-specific tariffs will be subject to such tariffs, plus the 20% fentanyl tariffs, plus any applicable Section 301 duties. For its part, China committed to reduce the rate applicable to U.S. goods to 10%.
Both countries committed to undoing the retaliatory escalations that each put in place beginning April 8. Based on the announcement, Politico reported that “If the two sides fail to reach an agreement within the next 90 days, the 10 percent reciprocal tariff would increase to 34 percent, which is the rate Trump announced for China on April 2 and that ignited a round of tit-for-tat tariff retaliation with Beijing.”
