The Dow surged over 1,000 points after the Trump Administration and China reached a new bilateral agreement, aimed at lowering tariffs, reducing retaliatory measures, and establishing a foundation for future economic dialogue. The deal was announced today by President Donald Trump following high-level negotiations over the weekend in Geneva, Switzerland, marking the first joint trade statement between the two nations in several years.
The agreement comes directly after a similar breakthrough deal between the United States and the United Kingdom, underscoring the Trump administration’s renewed emphasis on trade diplomacy.
Under the terms of the deal, both countries will reduce tariffs by 115% while retaining a baseline 10% tariff on each other’s goods. The changes are set to take effect on May 14. China has agreed to remove the retaliatory tariffs and non-tariff barriers imposed since early April. The United States will eliminate additional tariffs imposed on China in April but will maintain pre-April tariffs, including Section 301 and Section 232 duties, among others.
The move is seen as a step toward addressing the longstanding US trade deficit with China, which totaled $295.4 billion in 2024 — the largest with any US trading partner. According to the joint statement, the deal seeks to begin correcting trade imbalances that have contributed to domestic job losses and a weakening manufacturing sector in the United States.
As part of the agreement, both nations will suspend their respective 34% tariffs imposed in early April for a 90-day period, though each side will maintain a 10% tariff throughout the suspension. U.S. officials emphasized that the 10% tariff serves as a structural safeguard for American manufacturing and labor interests.
The deal includes commitments from both countries to take “aggressive actions” to curb the flow of fentanyl and its chemical precursors from China to North America, reflecting an effort to link trade and national security concerns.
