China, US cut crippling tariffs: What the deal really means

China and the United States have agreed to significant cuts in the tariffs they imposed on each other in recent months after talks over the weekend in Switzerland.

The two nations have also agreed to continue to negotiations.

Here’s a look at the deal and what it means for trade and the U.S. economy:

• The U.S. agreed to reduce its tariffs on Chinese goods from 145% to 30%, according to The New York Times. China will slash its tariffs on U.S. imports from 125% to 10%.
• The reductions will last for 90 days while officials continue to negotiate.
• China also agreed to suspend or cancel other actions it had taken in response to the U.S. tariffs, according to CNN. China had previously ordered restrictions on exports of some rare-earth minerals, placed American firms on its “unreliable entity list” and “export control list,” and launched an anti-monopoly probe DuPont, a U.S. chemical company
• The deal breaks an impasse that had brought much of the trade between China and the U.S. to a halt, the Times said. But businesses are now likely to face a flood of pent-up demand as companies race to schedule shipments while tariffs are reduced.
• The U.S. said it is now negotiating for China to buy more American products, according to NPR. The first Trump administration negotiated such a deal in 2020, but China ended up purchasing none of the $200 billion in goods the U.S. said it would.
• Business leaders in the U.S. had been warning that the tariffs were likely to result in price spikes and product shortages. And Chinese factories were slowing dramatically, according to CNN.
• Stocks jumped as a result of the news, CNBC said. The S&P 500 was up about 2.6% Monday morning. European indexes were also higher.
• The situation isn’t resolved yet. The European Chamber of Commerce in China said it was “encouraged” by the announcement, but that “uncertainty remains” because the tariffs are only temporarily suspended, according to the Times.

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