President Donald Trump honors the Super Bowl LIX champion Philadelphia Eagles at The White House in Washington D.C., on April 28, 2025.
Washington D.C. – President Donald Trump on Monday hailed what he called a major breakthrough in U.S.-China trade relations, announcing that China has “agreed to open up” its economy. The two countries struck a surprise agreement to slash most of the tariffs that had defined their protracted trade war.
Speaking at the White House before signing an executive order on drug prices, Trump said the deal reached in Geneva over the weekend could mark a turning point in U.S.-China economic ties. “Maybe the most important thing is that they’ve agreed to open up China,” Trump said. However, he added, “We have to get it papered,” suggesting that nothing has been finalized.
The agreement includes a 90-day suspension of most tariffs between the world’s two largest economies. The U.S. will reduce tariffs on Chinese imports from 145% to 30%, while China will cut its retaliatory tariffs on American goods from 125% to 10%. Tariffs on steel, aluminum, and fentanyl-related products will remain in place.
Markets soared on the news. The Dow Jones Industrial Average surged nearly 1,000 points, or 2.3%, while the S&P 500 and Nasdaq climbed 2.7% and 3.5% respectively. Investors shifted to riskier assets, with tech stocks leading the rally—Apple jumped 5.7%, Tesla rose 6.8%, and Amazon soared 7.7%. Safe-haven assets, like gold and U.S. Treasuries, declined sharply.
Treasury Secretary Scott Bessent, one of the chief U.S. negotiators, said the deal reflects a pragmatic approach after months of economic disruption. “We tried to identify shared interest,” Bessent told CNBC. “China needs the U.S. market more than we need theirs.”
Economists praised the temporary rollback as a potential shield against recession. “This is a big positive surprise,” said Jeff Buchbinder of LPL Financial. “Markets didn’t expect this level of de-escalation.”
The tariffs, introduced after Trump’s April 2 “Liberation Day” proclamation, had paralyzed trade, sparked inflation fears, and roiled markets. Monday’s move appears to reverse much of that economic risk, though Bessent emphasized it’s a pause—not a permanent resolution.
“This is just a pause,” he said, noting tariffs could rise again if talks stall. Trump agreed, stating that rates wouldn’t return to 145%, but they could “go up substantially higher” if no one can reach a deal
Still, administration officials and economists alike say the 90-day window provides an opportunity for long-term structural negotiations, including efforts to decouple supply chains for strategic goods and reduce non-tariff barriers to American businesses.
“This is a historic fresh start in the U.S.-China relationship,” said National Economic Council Director Kevin Hassett.
The tariff suspension is set to take effect Wednesday.
