Trump and Xi Jinping ease trade tension

On Monday, 12 May, the governments of the United States and China announced that they had reached an agreement to lower tariffs to 30% and 10%, respectively, for a period of 90 days. The pact eases fears of a recession amid the trade war launched by U.S. president Donald Trump last February, which has shaken the entire planet—particularly the Chinese economy led by his counterpart Xi Jinping.

Under the deal, Washington will cut its tariffs on the Asian giant from 145% to 30%, while Beijing will reduce its duties on the United States from 125% to 10%. The agreement was announced at a Geneva press conference by U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent, according to France24.

The truce will last 90 days, during which officials from both countries will continue negotiations to resolve their economic disputes, the two governments said.

Stock markets surged after the world’s two largest economies pulled back from a confrontation that had destabilized the global economy.

The dollar also strengthened on the news, helping to dispel recession worries sparked last month by Trump’s escalating tariff measures, which he said were aimed at reducing the U.S. trade deficit.

The tariff dispute had paralyzed almost US$600 billion in bilateral trade, disrupting supply chains, fueling fears of stagflation and causing some layoffs.