GENEVA -After days of intense talks in Geneva, the United States and China have reached a major trade deal agreement. This deal eases tensions between the two countries and covers nearly $600 billion in yearly trade.
U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer led the American team, while Chinese Vice Premier He Lifeng headed the group from Beijing. The agreement is seen as an important achievement for President Donald J. Trump’s economic policy.
While the full terms will be shared soon, both sides expect the changes to help address the U.S.’s $1.2 trillion trade deficit and settle global markets.
What’s Included in the Trade Deal So Far
Complete details will be revealed after Monday’s joint statement, but some key points are already known. The United States plans to cut tariffs on Chinese goods, lowering them from 145% to around 80%. President Trump mentioned this possible new rate on Truth Social last week.
This trade deal aims to restart trade between the two largest economies. On the other side, China has agreed to set up a new “consultation mechanism” for ongoing trade and economic issues, which will be sorted out soon. Chinese Vice Premier He Lifeng said this new platform will address concerns like market access, intellectual property rights, and China’s export policies.
The agreement also tackles Trump’s emergency order over the trade deficit and the fentanyl crisis. U.S. officials are confident the deal will help solve these problems, suggesting China will take steps to limit exports of chemicals used to make fentanyl.
There are also signs China will buy more U.S. goods to help close the $295 billion goods trade gap, though specific products and amounts have not been released yet. Both sides highlighted their “mutual respect” and “shared interests,” with Chinese media describing the outcome as an “important consensus” that supports the world economy.
A Clear Win for Trump
This new trade deal is a major win for President Trump, who has focused on trade reform since his second term began. He raised tariffs to 145% to push China to the negotiating table, acting quickly to address what he calls unfair trade policies.
On Truth Social, Trump shared that there was “much agreed to” and spoke about resetting trade ties with China. He said he wants more business opportunities for Americans in China, calling the talks a sign of “great progress.”
The deal shows Trump’s willingness to use America’s economic power to pressure rivals. High tariffs forced China to participate after weeks of pushback. The agreement follows Trump’s promises to lower the trade deficit and support U.S. industries, especially manufacturing and agriculture.
Measures against fentanyl also help his domestic goals, responding to a health crisis affecting many Americans. Political experts believe this will boost Trump’s support going into the 2026 midterms, strengthening his image as a leader who stands up for American workers.
The quick outcome, reached in just two days, also highlights the efforts of Bessent and Greer, who managed difficult negotiations with speed. Greer described the process as finding “differences not so large as maybe thought.” This swift action stands out compared to longer talks under previous presidents, building Trump’s reputation for quick decisions.
China’s Economy Under Pressure
China agreed to talks because of serious problems at home. U.S. tariffs of 145% and China’s own 125% tariffs in response have badly hurt Chinese exports. In April 2025, shipments to the U.S. dropped 21% compared to last year.
Factories in China are struggling, with many businesses in furniture, toys, and textiles going under. Nomura, a well-known bank, said the trade fight could cost China up to 16 million jobs, adding stress to the country’s main industrial regions.
China faces bigger economic troubles, too—falling consumer confidence, a shaky property market, and less outside investment have left President Xi Jinping with few options.
Analysts point out that China had to act to avoid being cut off further, especially as other trading partners like the UK secured exceptions. Scott Kennedy from the Centre for Strategic and International Studies said, “China couldn’t say no forever,” referring to China’s need to stop economic losses. While Chinese media still use tough language, the new deal shows a more practical approach than before.
Market Response After Trade Deal: Relief and Caution
Financial markets welcomed the Geneva deal with hope. The Nasdaq jumped 1.8% in pre-market trading Monday, as investors looked forward to less trade conflict. The Dow Jones and S&P 500 also saw gains, with futures up 1.2% and 1.4%. Companies tied closely to U.S.-China trade, like Apple and Tesla, saw their stock increase by 2.5% and 3.1%, showing renewed confidence in supply chains.
Still, experts say the market boost may not last without more details. Sarah Klein at Goldman Sachs said, “Any sign of a truce helps markets, but the details matter,” while warning that inflation is still an issue. Goldman Sachs expects a key inflation number to double to 4% by the end of the year, thanks to ongoing tariff effects.
