US-China Trade Tensions Ease as Both Sides Agree to Cut Tariffs

TEMPO.CO, Jakarta - The United States and China announced a joint agreement to slash reciprocal tariffs on Monday, May 12, 2025. Washington and Beijing sought to end the trade war that has overthrown the global economy for months and pushed the financial markets to collapse.

On Monday, both countries announced their agreement to temporarily reduce the high tariffs they had imposed on each other. Tariffs caused global stocks and the US dollar to soar as the world's top two economies restrained the trade war that has sparked concerns about a worldwide recession.

As reported by France 24, the U.S. will reduce the additional tariffs imposed on Chinese imports last month from 145 percent to 30 percent for the next 90 days. Meanwhile, China will reduce its import duties on U.S. goods from 125 percent to 10 percent.

Trump targeted countries worldwide with tariffs to reduce the U.S. trade deficit. The most aggressive tariffs were imposed on China. The financial markets plummeted following the implementation of these tariffs, prompting the U.S. to stop most reciprocal tariffs against dozens of countries last month.

Before Trump took office in January, China was burdened by a 25 percent tariff imposed by the U.S. on many industrial goods.

The agreement does not include the exemption of cheap e-commerce goods from China and Hong Kong, which the Trump administration halted on May 2, according to sources familiar with the negotiations.

However, the agreement surpassed analysts' expectations after weeks of confrontational rhetoric on trade. Last week, Trump suggested reducing tariffs to 80 percent.

Vice Premier of the State Council He Lifeng will be the chief negotiator for China. U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will lead the discussions at the White House.

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