U.S. and China push pause on tariffs, and while businesses and some farmers celebrate, 'repercussions will linger'

The U.S. and China will reduce reciprocal tariffs
by 115%. (Adobe Stock photo)

The United States and China agreed to scale back their reciprocal tariffs in an effort to ease tensions as they begin trade negotiations.

Both countries agreed to "temporarily reduce the punishing tariffs they have imposed on each other," report Daisuke Wakabayashi, Amy Chang Chien and Alan Rappeport of The New York Times. "The Trump administration [has] backed off, for now. . . and agreed to hold more formal talks with Beijing after companies and consumers started showing signs of economic strain."

According to the 90-day rollback agreement, the United States would "reduce the tariff on Chinese imports to 30% from its current 145%, while China would lower its import duty on American goods to 10% from 125%, the Times reports. "China said it would suspend or revoke countermeasures adopted in retaliation for escalating tariffs."

Treasury Secretary Scott Bessent suggested "the two countries might discuss deals for China to purchase more American goods. Such a deal could help narrow the American trade deficit with China," the Times reports. "The agreement breaks an impasse that had brought much trade between China and the United States to a halt."

Despite some room for celebration by businesses from both countries, the past weeks of tariffs have taken a toll. The Times reports, "Businesses are likely to encounter pent-up demand, leading to higher transport prices, as companies race to schedule shipments during the 90-day negotiating window. . . . Global stock markets jumped with the announcement."

The reduced tariffs were an especially welcome change for U.S. soybean farmers. "Soybean futures surged in overnight trading . . . ," reports Tony Driebus of Successful Farming.