The United States and China have announced a 90-day suspension of most of the high import tariffs they had imposed on each other. This signals a step back from their trade war that has unsettled the global economy.
This suspension is set to take effect by 14 May, according to a joint statement from the world's two largest economies released after two days of negotiations in Geneva, closely monitored worldwide.
In essence, both sides have agreed to halt 115 percentage point surcharges they had imposed in recent weeks, as part of a standoff initiated in April by US President Donald Trump, who criticised a trade imbalance favouring China.
This decision temporarily brings US tariffs on China down to 30% and Chinese tariffs on the US to 10%, while further negotiations continue, explained US Trade Representative Jamieson Greer at a press conference in Geneva.
The announcement of this truce immediately calmed financial markets, with Hong Kong's stock exchange, for example, jumping over 3% within minutes of the joint statement's release. The dollar, which had suffered from the trade war, recovered against the yen and the euro.
"No side wants a decoupling" of their economies, said US Treasury Secretary Scott Bessent in Geneva on Monday. "We want a more balanced trade relationship," he added, noting that the tariffs introduced in recent months had effectively created an "embargo" on exchanges between the two nations.
Reducing these tariffs is "in the common interest of the world," the Chinese Ministry of Commerce commented on Monday, welcoming "substantial progress" in trade talks with Washington.
The truce announced on Monday is the result of two days of negotiations in Geneva between, on the American side, Bessent and Greer, and on the Chinese side, Vice-Premier He Lifeng.
According to the joint statement, the two countries have also agreed to "establish a mechanism to continue discussions on trade and economic relations."
