US and China agree to cut tariffs for 90 days

The United States and China have agreed to reduce the taxes they put on each other’s goods for 90 days.

US Treasury Secretary Scott Bessent said both countries will lower their taxes by 115% for a short time.

This agreement came after talks in Switzerland. These were the first talks since US President Donald Trump placed high taxes on goods from China.

The high taxes caused problems in financial markets and made people worry about a global slowdown.

President Trump had placed a 145% tax on Chinese goods. China answered with a 125% tax on some US goods.

Now, the US will reduce its tax on Chinese goods to 30% for 90 days. China will reduce its tax on US goods to 10% for the same time. This will start on 14 May.

The US also added a rule to push China to stop the illegal sale of fentanyl, a strong drug.

The taxes had made trade between the two countries slow down. US ports saw fewer ships from China. In China, factories were slowing down and some workers were losing their jobs.

Scott Bessent said, “Both sides do not want to break ties. The very high taxes felt like a trade ban, and no one wants that. We want trade, fair trade, and both sides want to make it work.”

China’s commerce ministry said this agreement is a good first step. It will help fix problems and build stronger ties.

The deal helped the stock markets. Hong Kong’s market rose by 3%. China’s market rose by 0.8% before the news came out. Europe’s markets also went up. US markets are expected to open higher by 2-3%.

Gold prices, which had gone up during the trade fight, dropped by 3% to $3,224.34 an ounce.

Both countries said they will keep talking. Scott Bessent and China’s Vice Premier He Lifeng will lead the talks. They hope these talks will fix more trade issues. They said the talks will be honest, open, and respectful.

source- BBC