China, US Agree to Cancel 91% of Additional Tariffs in Geneva Talks

Word on the StreetMonday, May 12, 2025 11:06 am ET
2min read

On May 12, China and the United States issued a joint statement following their Geneva trade talks, marking a significant development in the ongoing trade negotiations between the two economic superpowers. The statement outlined a series of measures to be taken by both countries by May 14, 2025. The U.S. agreed to suspend the additional 24% tariffs on Chinese goods, retaining only the 10% tariffs, and to cancel the extra tariffs imposed by Executive Orders 14259 and 14266. In response, China agreed to suspend the additional 24% tariffs on U.S. goods for 90 days, retaining only the 10% tariffs, and to cancel the additional tariffs imposed by Tax Commission Announcements 5 and 6.

The joint statement also emphasized the establishment of a mechanism for continued consultations on economic and trade relations. These consultations can be held in either China, the U.S., or a third country agreed upon by both parties. As needed, both sides can engage in working-level discussions on relevant economic and trade issues. This agreement effectively returns the tariffs between the two countries to the levels before the U.S. initiated its tariff war on April 2, 2025. The significance of this development extends beyond the two countries, impacting the international economic order, multilateral trade system, and global economic prospects.

The joint statement serves as a political model for current international relations, demonstrating that unilateralism and economic coercion are not universally effective. It highlights China's capability to uphold international fairness and justice, acting as a stabilizer in international relations. Throughout the trade negotiations, China has consistently advocated for dialogue based on mutual respect and equality, refusing to compromise on principles or fairness. The choice of Geneva, the headquarters of the World Trade Organization, for the talks underscored China's commitment to the principle of equality and its support for multilateral mechanisms.

The text of

statement reflects China's unwavering stance on principles. According to the statement, the U.S. canceled 91% of the additional tariffs, and China reciprocated by canceling 91% of its retaliatory tariffs. Both countries agreed to suspend the 24% reciprocal tariffs. This outcome underscores that negotiations cannot proceed on the basis of unilateral tariff increases, and that China's insistence on correcting these errors was a precondition for the talks. The establishment of a mechanism for economic and trade consultations between China and the U.S. provides a framework to reduce the volatility and unpredictability of future negotiations, enhancing mutual trust between the two countries.

Despite competition in various domains, China and the U.S. have shown that mutual respect and cooperation are possible. The issuance of the joint statement represents a significant step forward in this direction. Compared to other economic entities, the Geneva talks between China and the U.S. exemplify the principles of equality and mutual benefit. This outcome is a result of China's national strength, diplomatic wisdom, and determination to safeguard its national interests. China's approach not only benefits its economic and trade relations with the U.S. but also sets a valuable precedent for other economies.

In the face of the U.S.-led global tariff war, responses from various economies have been mixed. Historical, geopolitical, and economic autonomy differences make it challenging for the international community to reach a consensus on the U.S.'s coercive actions. China's actions demonstrate that appeasement does not bring peace, and concessions do not earn respect. Only through equal consultations can disputes be resolved, and fairness and justice, as well as national interests, be upheld. However, it is important to recognize that the consensus reached in the Geneva talks has a fragile foundation. The U.S. has begun to feel the negative impacts of the tariff war on its domestic supply chain and financial markets, leading to a shift in its tariff strategy from a one-time heavy imposition to a phased approach.

While the joint statement aligns with the interests of producers and consumers in both countries and meets global expectations, China's mission to deepen reforms remains urgent. Expanding the domestic unified market, addressing bottlenecks in people's livelihoods, optimizing income distribution, removing barriers to production and consumption, and improving total factor productivity are essential for China's long-term economic stability and growth.