In a significant development for the global economy, China and the United States have agreed to temporarily suspend tariffs and continue trade negotiations. After two days of intensive talks in Geneva on May 12, both nations announced a 90-day halt on tariff increases, providing a much-needed respite for markets and businesses worldwide.
The agreement includes the establishment of mechanisms for further discussions between Chinese Vice Premier He Lifeng, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative Jamieson Greer. This move signals a possible thaw in relations between the world’s two largest economies, which have been embroiled in trade tensions that threatened global economic growth.
Earlier this year, the International Monetary Fund warned that escalating tariffs could usher in a “new era” of slower growth, cutting its forecast for global growth from 3.3 percent to 2.8 percent. Countries heavily reliant on international trade, like Malaysia, expressed concerns over the impact of U.S.-China trade tensions on their economies. Malaysian Prime Minister Anwar Ibrahim noted that high tariffs imposed on China inevitably affect Malaysia’s trade and investment ties.
The joint statement brings optimism for not only trade relations but also broader bilateral ties between China and the U.S. However, experts caution that more work lies ahead. Both countries will need to outline the framework for future talks, prioritize urgent issues, and engage in detailed negotiations at various levels. If both sides act in good faith and with mutual respect, significant progress can be achieved within the next 90 days.
China’s Ministry of Commerce expressed hope that the U.S. will collaborate to thoroughly correct unilateral tariff increases and strengthen mutually beneficial cooperation. The Ministry emphasized the importance of maintaining healthy, stable, and sustainable development of bilateral economic and trade relations to inject greater certainty and stability into the world economy.
This temporary suspension of tariffs is seen as an important first step toward easing trade tensions. The international community now watches closely, hoping that continued dialogue will lead to lasting solutions that benefit not only China and the U.S. but also the global economy.
