US, China Agree to Slash Tariffs, Establish Trade Consultation Mechanism After “Constructive” Geneva Talks

After two days of intensive commercial talks in Geneva, the United States and China have agreed to establish a new “economic and commercial consultation mechanism” and considerably reduce the rates that have set the relations between the two largest economies in the world.

The announcement follows what the two parties have described as “constructive” and “candid” negotiations aimed at softening a pricing war of several years.

Chinese Deputy Prime Minister, He Lifeng, who led the Beijing delegation, told journalists that “the two parties have taken an important measure to resolve the differences through equal dialogue and consultation”. He said discussions have led to the decision to create a joint mechanism that will facilitate new negotiations on economic concern about mutual concern.

“We will publish a joint statement on Monday,” he said the official Xinhua news agency, adding that the two parties are preparing for “other consultations”.

He expressed Beijing’s desire to continue working with Washington “to manage differences, widen the cooperation areas and enlarge the pie from cooperation”.

The CCTV state diffuser indicated that “substantial progress” had been made during talks, describing the atmosphere as “frank, in -depth and constructive”.

Price cuts: 90 -day chronology set

One of the most important results in the meeting was an agreement of both parties to start reducing the prices that had been imposed during the climbing of the trade conflict. The Financial Times said that by virtue of the new arrangement, the United States will lower the prices on Chinese imports from a current average of 145% to 30%, while China will reduce its prices on American products from 125% to 10%. These discounts should take place over a period of 90 days.

Vice-Prime Minister, he stressed that if China remains open to dialogue, it will not be intimidated. “China will not be afraid,” he said, according to Reuters. “If the United States insists on continuing the trade war, we will fight until the end.”

The American delegation was led by the secretary of the Treasury Scott Bessent and the US trade representative Jamieson Greer.

Secretary Bessent said: “I am happy to announce that we have made substantial progress between the United States and China in very important commercial negotiations.”

Greer confirmed the creation of the consultation mechanism, calling for the result “an agreement that we have concluded with our Chinese partners”.

“It was, as the secretary pointed out, two very constructive days,” said Greer in a declaration from the White House. “It is important to understand how fast we have agreed, which reflects that the differences were perhaps not as tall as perhaps thought.”

The markets react positively

Following News from Geneva, the world markets reacted favorably. American actions gathered on Monday morning, the S&P 500 and Dow Jones opening the two of them higher, while investors praised the signs of thaw in American-Chinese trade tensions. The Nasdaq, rich in technology, has also seen gains, supported by hopes that reduced prices will benefit from supply chains and facilitate pressures on costs on consumer goods.

Business Insider said that “the markets encourage the positive signs of commercial negotiations with China during the weekend”, citing gains through key clues. The article noted that “investors were encouraged by tariff rollbacks and commitment to dialogue between Washington and Beijing”.

What comes next?

The joint declaration expected Monday will describe the framework of the new consultation mechanism, will identify the priority areas of the dialogue and provide a calendar for future talks.

The Geneva Agreement marks an important moment in American-Chinese relations, which have been darkened by disputes, sanctions and geopolitical rivalries in recent years. Although the challenges remain, the tone and the result of the talks suggest a will of the two parties to reset the trajectory of their economic relationship, at least in the short term.

However, the two parties have clearly indicated that new negotiations will be necessary. And while the prices are being reduced, they are not entirely eliminated.

Vice-Prime Minister, he said: “The door of cooperation is open, but we will not compromise fundamental interests”, a feeling that Greer has echoed, noting “there is still work to do, but we have demonstrated what can happen when the two parties are in good faith.”

This means that nothing so far is concrete. Although the progress recorded so far highlight the hope of a positive result, negotiation is always open, with a lot of potential.