The United States and China have taken a major step to calm their trade dispute. Both countries agreed to cut tariffs for 90 days. This agreement gives businesses time to recover and lets both sides continue talks.
The U.S. will reduce its tariffs on most Chinese goods from 145 per cent to 30 per cent. China will cut its tariffs on American products from 125 per cent to 10 per cent. These cuts affect many important products, including some linked to fentanyl.
Leaders Want Stability, Not Conflict
U.S. Treasury Secretary Scott Bessent said that neither country wants to break economic ties. He said the goal is to create space for better negotiations. China also said it wants peace and respect in its trade relationship with the U.S.
In a white paper, China said it can handle any pressure but prefers cooperation. China added that threats will not work and respect is the best way forward.
Markets React with Caution
The news of the deal helped stock markets. S&P 500 futures went up by 1.1 per cent to 1.4 per cent. Nasdaq futures rose by 1.4 per cent to 1.9 per cent. Although some had hoped for bigger gains, the rise shows relief among investors.
Analysts say the 90-day deal is helpful but only temporary. Everyone is now waiting to see if the U.S. and China can reach a lasting agreement. More details are expected soon in a statement from the White House.
Talks Show Progress, But Not Final
The Geneva talks included top officials from both sides. They said good progress was made, though no final deal was signed. The tariff cuts show that both countries are serious about reducing tension.
Many hope the 90 days will be used wisely to reach a better, long-term trade deal.
