America and China agree to reduce import duty on each other's goods

13-May-2025 04:21 PM

Geneva. The United States and China, the world's two largest economies, have agreed to temporarily reduce import duties on each other's products in a move aimed at easing trade tensions and providing additional time—three months—to resolve outstanding disputes. A joint statement confirming the development was issued from Geneva.

Currently, the United States imposes a 145 percent customs duty on most Chinese products, including fentanyl. Starting May 14, this will be reduced to 30 percent.

In response, China will lower its 125 percent duty on American goods to 10 percent. The U.S. Treasury Secretary stated that the talks were productive and held in a cordial environment. Both sides agreed to refrain from making any hasty decisions and are working on creating a mechanism to ensure continuous dialogue on economic and trade matters.

Analysts believe that both countries have acknowledged the fact that deteriorating trade relations are harmful to both. This understanding has led to a softening of stances and a renewed willingness to negotiate.

The U.S. had been facing significant revenue losses due to the halt in Chinese imports, and exports of key American products like soybean and corn to China had declined sharply. On the other hand, China was concerned about losing access to the vast American market, which was also affecting its export revenues.

The ongoing positive discussions have already contributed to stability in the Chinese stock market. The temporary reduction in tariffs is expected to ease volatility in global markets.

Although this is only a temporary agreement, the round of talks between the two nations continues, signaling a possible long-term resolution in the future.