Trade Tensions Cool as US, China Reach a Truce, Slash Tariffs for 90 Days
“The prospect of much lower-than-expected tariffs and a 90-day window for further talks open the possibility that the worst damage to the economy may be averted.”
Trade talks between the U.S. and China held this weekend in Geneva, Switzerland, proved to be highly constructive. The two-day meeting concluded with both nations agreeing to reduce most tariffs to 10% for a period of 90 days. During this time, the U.S. trade delegation—led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer—will collaborate with their Chinese counterparts to negotiate what Bessent hopes will be “a long-lasting and durable trade deal.”
A separate 20% tariff, imposed by Trump in response to what he characterized as China’s involvement in the fentanyl trade, will stay in place.
To that point, The Wall Street Journal reported:
In a private meeting on Saturday, Bessent picked up a bit of sugar out of a dish on the table and told Chinese officials that the amount he was holding could kill a person if it were fentanyl, said a person with direct knowledge of the exchange. Bessent picked up a little more sugar and said that amount could kill people across Geneva. Then he picked up more and said that much could kill people across Switzerland.
Speaking to reporters at the White House on Monday, President Trump “confirmed that 25% tariffs on cars, steel and aluminum remain in effect — and duties on pharmaceuticals could still happen,” as per The New York Post.
According to the Journal, Bessent said that talks on a broader deal will begin in the next couple of weeks. He noted that “a clear break between the two economies wasn’t desirable” and that “neither side wants to decouple.”
Bessent said the U.S. still had grave concerns about its unbalanced trading relationship with China. He cited issues such as China’s management of its currency and its subsidies for manufacturing, which Washington believes are a major factor driving factory-job losses in the U.S. Those and other issues will be discussed in talks over the next 90 days, he said.
The outcome forestalls for now what was shaping up to be a destructive clash between the world’s two biggest economies, with potential ripple effects across the globe.
…
The prospect of much lower-than-expected tariffs and a 90-day window for further talks open the possibility that the worst damage to the economy may be averted.
Bessent told reporters on Monday, “The Chinese delegation basically told us that once President Biden came into office, they just ignored their obligations.”
🚨 HOLY SMOKES: Treasury Secretary Scott Bessent just revealed that the Chinese said during their closed-door talks that they IGNORED their trade commitments under Biden because they knew he was weak.
"The Chinese delegation basically told us that once President Biden came into… pic.twitter.com/vdJDoRUr4y
— Eric Daugherty (@EricLDaugh) May 12, 2025
This was a far better outcome than most analysts were expecting. In a Friday Truth Social post, Trump mused that an “80% Tariff seems right! Up to Scott.″
Stock market futures soared immediately following the announcement. The momentum carried into Monday. Global stock markets surged and the dollar strengthened in anticipation of stronger GDP growth in the U.S.
Up until the weekend talks in Geneva, the Chinese projected defiance and pride. In fact, just two weeks ago, China’s Ministry of Foreign Affairs released a video titled, “Never Kneel Down!” According to Chinese officials, “bowing to a bully [U.S.] is like drinking poison to quench thirst — it only deepens the crisis.”
But behind the bluster were indications that the Chinese economy was beginning to buckle under the pressure. Reports surfaced of growing worker unrest across China, driven by “production shutdowns and job cuts,” along with a warning from Goldman Sachs that as many as 16 million Chinese workers could soon face unemployment.
A spokesperson for China’s Ministry of Commerce said that Beijing hopes the U.S. will “continue to move forward in the same direction with China, completely correct the erroneous practice of unilateral tariff hikes, and continually strengthen mutually beneficial cooperation.”
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on LinkedIn or X.
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Comments
Now do chinese industrial espionage.
Then do chinese bullying which has been increasing.
Then do chinese increasing violation of the monroe doctrine
Then do chinese actions in the south china sea and towards taiwan.
Then do chinese involvement in BRICs (for that matter do Indias)
Then do chinese weaponization of space
Then do chinese seizure of tibet
Then do chinese animosity towards Israel
Then do chinese support for the nutjobs in North Korea
These are off the top of my head. Others?
as long as they dont close down any of the chinese restaurants in america
plenty are closing down. they used to be family run restaurants, but latest generations don’t want to inherit and run them.
I don’t know what kind of food they serve in restaurants near you but it’s been my experience that the fried creations in most places doesn’t seem to have any Chinese roots at all, and the restaurants are never owned or operated by anyone actually from China.
Forgot:
Then do chinese purchase of US assets especially farmland.
Then do chinese spy balloons in US.
euroscum gonna be mad!!
maga!!!
Old and busted: Orange Man Bad
New hotness: Orange Man Badass
I wonder if Xi Ping now understands that even if he could win a war over Taiwan, the CCP will lose China. He is pretty dense. He may not.
He’s such a Poohbear.
This is true. Xi and his bootlickers will continue to bluster about Taiwan, but even these tariffs did serious damage to China’s economy. The outright trade embargos China would face for an invasion or blockade would wreck the country. Add to that the serious chance that any invasion attempt would fail and I tend to think the lesson has been learned. We’ll see, of course, but this might have settled things down for a while.
I believe they need more marine lift capability to get their troops over to taiwan. they could blockade it of course. i don’t know have self-sufficient taiwan is.
It seems to me that everyone who was defending tariffs as policy are formally beclowned by Trump now acknowledging it isn’t good.
Umm. They worked. The threat of tariffs got major concessions. Just like we said they would.
The point of slapping high tariffs around is the same as slapping someone in the face; to get their attention. That phase certainly worked. The next pause was dependent upon the response of the individual Nations. Some came rather quickly to make a better deal for the USA and the tariffs were lowered. Some, like.China, chose to bluster and the tariffs were raised higher to ensure they got the flipping message that we are.serious and that China would be required to negotiate. That phase was successful as shown by the temp agreement to lower tariffs for a 90 day period of trade negotiations.
End state will probably be a minimum 10% universal tariff on all imports. Depending upon how closely these Nations wish to cooperate with the USA militarily, diplomatically and culturally (emphasis on West values like free speech, not banning political opposition) will then determine how closely we can work economically. Rewarding the most cooperative with better, more favorable terms than Nations who are uncooperative.
Really? He said that? Quote him.
Trump has always used tariffs as weapons in negotiations. We understand this, troll. Why don’t you?
Of course that’s your takeaway, Danny. You’ve been beclowning yourself the last month with your impressive ignorance of the economy, so why stop now!?
“It seems to me that everyone who was defending tariffs as policy are formally beclowned by Trump now acknowledging it isn’t good.”
Huh? Whatchoo talkin bout Willis?
Stock market rallies on the news. So much for the liberal Chicken Littles who were wrong AGAIN.
Markets go down much faster than they come back up. I’m still down by 50%.
There’s not a single broad index that is down 50% from imposition of tariffs to today. How did you manage that? I don’t see how you could have a paper loss (no realized loss or gain until the position is closed out by a sale) of 50% without putting all/most of your chips onto a single stock or play. Serious question though how are you down 50%?
I am very glad Scott Bessent is point on this negotiation. If our side has to do much talking I’m hopeful it will be him. Still want as much de-coupling as possible.