US and China Slash Tariffs in New Trade War Agreement

The US and China have decided to lower import taxes on traded goods. This move eases tensions from the ongoing trade war. The decision affects economies around the world, including the UK.

What’s Been Agreed?

Both sides have confirmed they will lower the tariffs they imposed during the recent trade fight. Some tariffs will be canceled completely, while others will be paused for 90 days, until May 14.

• US tariffs on Chinese goods will drop from 145% to 30%.
  
  

• Chinese tariffs on US goods will fall from 125% to 10%.
  
  

• China will also stop other trade bans, like the ban on exporting key minerals to the US.
  
  

However, the US will still keep an extra 20% tariff in place to push China to help stop the illegal trade of fentanyl, a powerful drug.

The deal was reached after talks in Switzerland — the first formal meeting between the two sides since tensions grew earlier this year.

What Happens After 90 Days?

Things are still uncertain. If no further agreement is made, some of the suspended tariffs may return. But because many of the toughest tariffs are now canceled, any return would still mean lower rates than before:

• US tariffs on China would rise only to 54%.
  
  

• Chinese tariffs on the US would go up to 34%.
  
  

Both governments say talks will continue. US Treasury Secretary Scott Bessent said neither side wants to break ties, while China called the deal a step toward better cooperation.

What Goods Are Traded?

The US and China trade a wide range of goods:

• The US exports soybeans, medicine, and oil to China.
  
  

• China sends electronics, computers, and toys to the US.
  
  

• The top US import from China is smartphones, many of which are iPhones made in China.
  
  

However, the US buys much more from China ($440 billion) than it sells to China ($145 billion). President Trump has often criticized this trade gap and used tariffs to try to fix it.

Who’s the Winner?

Both countries are claiming victory.

Experts say the US has pulled back more than China. Some believe China is now in a stronger position for future talks.

The White House praised the deal, calling it proof of President Trump’s strong negotiating skills. But others see it as just the start of new talks.

What’s Next?

Markets around the world reacted positively to the news. Investors hope this truce will boost trade again, especially for shipping companies.

Still, experts warn the fight isn't over. Relations are improving, but they remain fragile and could change quickly.