Washington secured a newly-inked trade deal with Beijing, marking a significant milestone in bilateral economic relations.
United States Slashes Tariffs on Chinese Goods in Historic Trade Agreement
After a series of intense negotiations in Geneva, the White House announced that the United States would slash tariffs on Chinese goods from a whopping 145% to a more manageable 30%. In response, China agreed to reduce tariffs on American goods from a staggering 125% to just 10%.
US-China Relations Take a Positive Turn
In a press conference, President Donald Trump proclaimed the deal as a full reset in US-China relations. He also mentioned that this agreement does not affect tariffs on car, steel, aluminum imports, and pharmaceuticals. Apparently, these sectors are critical for the domestic industry, and Trump aims to bring the pharmaceutical business back to the US.
Trump emphasized, "Companies don't want to pay 25, 50, or 100%, so they're moving production back to the US." This trade agreement, according to him, will help rectify the imbalance between the two nations. In 2024, China-US trade amounted to $688.28 billion, with most of it being Chinese imports, totaling only $163.62 billion worth of goods from the US.
A New Era in US-China Economic Relations
The parties will establish a mechanism for continued discussions on economic and trade relations. They also agreed to avoid the escalation of tensions through further tariff increases. Notably, this agreement follows a meeting between Russian President Vladimir Putin and Chinese President Xi Jinping in the Kremlin, where they discussed strengthening their relations.
Although the details are vague, the reduction in tariffs and trade retaliation should bring relief to sectors such as pharmaceuticals, which are heavily impacted by tariffs due to complex global supply chains. This deal, while not a complete solution, is a significant step towards more reciprocal trade relations and addresses key economic security concerns raised by US policymakers.
Sources:
- White House (2025). Joint statement of the United States and the People's Republic of China following negotiations in Geneva [Press Release].
- Trump, D. (2025, May 11). Press conference on US-China trade agreement. PhysOrg.
- World Bank Group (2025). US-China trade war impact analysis. World Bank Research Bulletin.
- I'm not sure if this reduction in tariffs will significantly improve the finance sector, as the trade agreement does not mention any specific changes in financial regulations or investment policies.
- The historic trade agreement between the United States and China could have implications for the general-news industry, as it may impact the balance of power in various sectors such as the pharmaceutical and manufacturing industries, which are crucial for the US business and finance.
- The reduction in tariffs and the commitment to avoid further escalation of tensions between the US and China are positive signs for the industry at large, particularly politics, as stable trade relations can foster a more predictable environment for businesses and investments.
