Truce or just a tariff tease? Trump and Xi hit pause on trade war
Markets cheer as China and US agree to 90-day reprieve
The bitter trade war between the United States and China that rattled global markets is getting a breather — but don’t pop the champagne just yet.
The US and China have agreed to suspend punishing tariffs on each other’s goods for 90 days, starting Wednesday, after a tense round of high-stakes talks in Geneva over the weekend. The temporary truce offers a sigh of relief for investors and businesses battered by months of retaliatory tariffs and trade uncertainty.
US President Donald Trump, speaking to Fox News, said the deal lays the foundation for a “strong trade agreement” and grants American companies wider access to China’s vast market.
“There’s a real chance to open things up,” Trump claimed, though exact details of the agreement remain under wraps.
The trade conflict, which saw tariffs soar past 100% on both sides, wreaked havoc on global supply chains and sparked fears of an all-out economic slowdown. China, hit hardest by Washington’s duties, responded with tit-for-tat measures, sending tariffs on US goods sky-high.
As part of the weekend agreement:
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The US will reduce its tariffs on Chinese goods to 30%, down from peaks as high as 245%.
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China will drop its tariffs to 10% on American products.
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Both cuts come into force just after midnight today, Wednesday, May 14 (Washington time).
Markets responded with cautious optimism, while Chinese President Xi Jinping used the moment to tout his country’s role as a “responsible global partner” during meetings with Latin American leaders in Beijing.
“There are no winners in a trade war,” Xi warned, as China’s foreign minister Wang Yi took a thinly veiled swipe at the US, slamming “a major power” for its reliance on “might makes right” tactics.
But the calm may be short-lived. The US has kept steeper tariffs in place over concerns about Chinese chemical exports linked to fentanyl production, a sticking point Beijing insists is unjust.
Washington is demanding action. Beijing wants the US to stop the blame game.
Bangkok Post reported that analysts warn the clock is ticking.
“Ninety days isn’t long enough to fix years of trade tension,” said Yue Su of the Economist Intelligence Unit, who cautioned that both sides may struggle to make deeper tariff cuts.
US companies reliant on cheap Chinese manufacturing, and Chinese firms already reeling from a property crisis and slowing domestic spending, are unlikely to see immediate relief.
“This is more of a band-aid than a breakthrough,” said Dylan Loh of Nanyang Technological University, adding that both economies “are bruised and still bleeding.”
For now, the world’s two largest economies have put their gloves down. But few believe the fight is truly over.
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