U.S. and China Strike Surprise Deal to Slash Tariffs, Calm Trade War

In a move no one saw coming this soon, the U.S. and China have reached a major agreement to temporarily roll back their punishing tariffs, marking a massive shift in one of the most heated global trade standoffs in recent memory. After a weekend of intense behind-closed-doors talks in Geneva, both sides announced the deal Monday morning, shaking up markets and signaling a potential path out of the ongoing trade war.

Effective May 14, the U.S. will reduce its tariffs on Chinese goods from a staggering 145% down to 30%, while China will slash its own retaliatory tariffs from 125% to just 10%. The rollback will last an initial 90 days, giving negotiators time to work toward a longer-term solution.

Markets immediately responded with optimism—Dow futures jumped over 2%, tech stocks rallied, and gold prices dropped as investor anxiety eased. This agreement doesn’t reverse everything: U.S. tariffs related to fentanyl will remain, and a broader deal is still a work in progress. But for now, the economic pressure cooker has cooled.

Both nations also agreed to continue meeting regularly, with high-level trade officials from each side planning follow-up discussions in the coming weeks. Treasury Secretary Scott Bessent called the breakthrough “an end to what had basically become an economic embargo.” Whether this deal holds and expands is still up in the air—but for businesses and consumers on both sides of the Pacific, this is the first real sign of relief in months.