By Faith Barbara N Ruhinda Updated at 1141 EAT on Monday 12 May 2025

The value of the US dollar and Chinese Yuan have both risen at the news of the suspension.

The dollar has risen in value against the pound, Euro and Japanese Yen.

The Yuan is also up against those three major currencies, as well as the dollar itself.

China had maintained a defiant stance as US tariffs spiralled. It retaliated with its own steep levies and pledged that it would not back down.

This country can take the pain of an economic war with America – to an extent. It is the lead trade partner for more than 100 other countries.

But officials in Beijing have become increasingly concerned about the impact the tariffs could have on an economy that is already struggling to deal with a property crisis and high youth unemployment.

Factory output has already slowed and there are reports that some companies were having to lay off workers as production lines of goods bound for the US began to grind to a halt.

The commerce ministry said the agreement reached with the US is an important step to “resolve differences” and “lay the foundation to bridge differences and deepen cooperation”.

Such a positive statement from Beijing would have seemed inconceivable just a month ago.

There is a slight sting in the tail. The ministry ended its statement with a reminder of who it sees as being in the wrong.

The tariff cut was bigger than expected – and that has been welcomed by analysts.

The current US tariff, at 30%, is still high – but has been described by analysts as “manageable”.

Some of the measures have only been paused, not cancelled.

As US Treasury Secretary Scott Bessent admitted this morning, the tariffs in place amounted to a de facto “trade embargo” between the world’s two biggest economies.

Those tariffs will now be reduced to more workable levels for an initial 90-day period. It’s a boost to the two protagonists involved.

But – in an interconnected world that continues to rely on strong US demand – this rapprochement will be welcomed internationally.

The rest of the world could not afford trade between the US and China to grind to a halt altogether.

A joint statement on the deal confirms the 90-day pause will begin on 14 May.

It also says both countries will “establish a mechanism to continue discussions about economic and trade relations”.

Scott Bessent will represent the US, while vice premier He Lifeng will represent the Chinese government.

The further talks may be held in the US, China, or an agreed third-party nation.

Ahead of today’s announcement the US tariff on most Chinese imports stood at 145%. That will now be reduced to 30% for the next 90 days.

China has reduced its own duties on US goods from 125% to 10% for the same period.

The US measures still include an extra component aimed at putting pressure on Beijing to do more to curb the illegal trade in fentanyl, a powerful opioid drug.

But US officials said they had been positively surprised by the willingness of China to deal with the problem.

We have reached an agreement on a 90-day pause,” says US Treasury Scott Bessent, who was negotiating with China in Geneva.

We’re waiting for more details on the new tariffs – but, as we’ve reported, Scott Bessent says each side will cut their tariffs by 115%.

The current US tariff on Chinese imports is 145% – while China charges a 125% tariff on some US goods.

China’s commerce ministry confirms the suspension of “all tariff countermeasures” taken against the US since 2 April.

Bessent says after “robust” discussions, the US and China have agreed a 90-day pause on “reciprocal” tariffs, meaning both sides will reduce their tariffs by 115%.

US Treasury Secretary Scott Bessent, speaking in Geneva, has just announced an agreement on tariffs between the US and China

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