Agreement Reached in Geneva Promises Tariff Reductions and Boosts U.S. Market Access

GENEVA – In a significant step toward de-escalating a heated trade war, President Donald J. Trump announced a breakthrough trade deal with China on Sunday, following two days of high-stakes negotiations in Geneva. The agreement, described as a “total reset” by Trump, aims to reduce tariffs, address the U.S. trade deficit, and open Chinese markets to American businesses, marking a pivotal moment for global economic stability.

The talks, led by U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, alongside Chinese Vice Premier He Lifeng, concluded with both sides reporting “substantial progress.” The White House hailed the outcome as a “trade deal,” while Chinese officials emphasized an “important consensus” focused on mutual economic benefits. A joint statement detailing the agreement is expected Monday, but early indications suggest a 90-day mutual tariff reduction of 115%—slashing U.S. tariffs on Chinese goods from 145% to 30% and China’s retaliatory levies from 125% to 10%—along with a new consultation mechanism to address ongoing trade disputes.

The negotiations, held at the Swiss U.N. ambassador’s villa in Cologny, followed months of escalating tensions sparked by Trump’s imposition of 145% tariffs on Chinese imports in February, citing unfair trade practices and China’s role in the fentanyl crisis. China’s 125% counter-tariffs had brought bilateral trade, valued at nearly $600 billion annually, to a near standstill, roiling global markets and raising fears of a recession. Trump’s social media posts during the talks struck an optimistic tone, stating, “A very good meeting today with China… much agreed to. We want to see, for the good of both China and the U.S., an opening up of China to American business.”

Analysts remain cautiously optimistic. “This deal signals a willingness to de-escalate, which is critical for global supply chains,” said Sun Yun, director of the China program at the Stimson Center. However, she cautioned that unresolved issues, such as China’s subsidies for tech industries and intellectual property concerns, could complicate future talks. The agreement builds on the unfulfilled 2020 Phase One deal from Trump’s first term, which saw China fall short of promised purchases of U.S. goods due to the COVID-19 pandemic.

The deal has sparked mixed reactions. Supporters on X celebrated Trump’s aggressive tariff strategy for bringing China to the table, with one user posting, “Trump’s tariffs forced Beijing to negotiate from strength.” Critics, however, argue the initial tariffs caused unnecessary market turmoil, pointing to a 10% drop in the S&P 500 since January. Retail giants like Walmart had warned of price hikes and supply chain disruptions, concerns that may ease with the tariff rollback.

The agreement also addresses the U.S. trade deficit with China, which reached $295 billion last year. U.S. negotiators pushed for structural reforms in China’s export-driven economy, though details on concessions remain forthcoming. “We’re confident this deal will help resolve the national emergency of our trade imbalance,” Greer said, referencing Trump’s declaration on trade deficits.

Global markets responded positively, with U.S. stocks poised for gains and oil prices rising as trade jitters subsided. However, the deal’s success hinges on implementation, with both sides wary of appearing to concede too much. China’s Xinhua News Agency called the talks a “necessary step” but stressed Beijing’s “unshakable” commitment to its interests.

As the world awaits Monday’s joint statement, the Geneva deal offers a reprieve from the trade war’s economic toll. For Trump, it’s a political win as he nears his first 100 days in office, reinforcing his “America First” agenda while navigating a complex global landscape.