Daijiworld Media Network- Washington

Washington, May 13: In a much-needed breather for the global economy, the United States and China have agreed to a 90-day ceasefire in their high-stakes trade war, announcing a significant rollback of tariffs imposed on each other’s goods and signalling renewed efforts to resolve their differences through dialogue.

The announcement came during a joint press conference held in Geneva, where US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent declared that the US would reduce its steep 145 per cent tariff on Chinese imports to 30 per cent, while China would slash its own rate on American goods from 125 per cent to 10 per cent.

Markets around the world responded positively. Wall Street futures saw a sharp rise, with the S&P 500 jumping 2.6% and the Dow Jones Industrial Average up by 2%. Asian and European markets also surged—Hong Kong’s Hang Seng Index rallied nearly 3%, while Germany and France saw gains of 0.7% each. Oil prices rose by over USD 1.60 a barrel, and the US dollar strengthened against the euro and yen.

As part of the deal, China’s Commerce Ministry confirmed that both sides agreed to cancel 91 per cent of existing tariffs and suspend an additional 24 per cent for the 90-day period, resulting in a total tariff rollback of 115 percentage points.

The truce aims to avert a total trade freeze, with Greer noting that continued escalation would have meant “a complete blockage” of goods between the two largest economies in the world—an outcome neither side is prepared to accept.

China also committed to pausing or eliminating retaliatory measures, including export restrictions on rare earth elements vital to defence industries and curbs on American companies listed in its “unreliable entity list.” The Chinese ministry described the breakthrough as an “important step” towards resolving long-standing disputes.

However, analysts caution that much depends on whether the two nations can bridge deep-rooted differences during the temporary pause. In an interview with CNBC, Bessent confirmed that negotiators would reconvene in a few weeks to build on the current progress.

Last month, former US President Donald Trump raised tariffs dramatically in a bid to pressure China, including a 20 per cent import tax targeting efforts to control the flow of fentanyl—a synthetic opioid—into the US.

While the longer-term outcome remains uncertain, the 90-day truce has, for now, restored a measure of calm to jittery global markets and raised hopes for a more sustained resolution in the weeks to come.