China and the United States agreed to sharply reduce tariffs on each other’s products over the weekend, drawing back from a trade war that had seen duties rise well into the triple digits. The announcement followed a May 10 meeting in Geneva, Switzerland, featuring U.S. Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and China’s Vice Premier He Lifeng. On May 11, a statement from the White House announced a “China trade deal” stemming from the talks. U.S. Trade Representative Ambassador Jamieson Greer mused: “It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought.” More details emerged in a joint statement on May 12. The United States agreed to give China essentially the same offer made to other countries affected by the April 2 “Liberation Day” announcement: a flat 10 percent tariff rate, with the additional “reciprocal tariffs” suspended for 90 days. The Trump administration also rolled back the successive tariff increases implemented on China after Beijing retaliated with its own tariffs. However, the Trump administration noted that sector-specific tariffs on automobiles, steel, aluminum, and pharmaceuticals will remain in place. Meanwhile, China will walk back all but 10 percent of its own retaliatory tariffs on U.S. imports. The U.S. readouts also highlighted new Chinese commitments on fentanyl production and exports, which Bessent called an “upside surprise.” A fact sheet claimed, “The United States and China will take aggressive actions to stem the flow of fentanyl and other precursors from China to illicit drug producers in North America.” China’s comments, however, did not mention the issue and it was not included in the official joint statement. China and the U.S. also agreed to “establish a mechanism to continue discussions about economic and trade relations.” Such regular talks have a long history – the Strategic Economic Dialogue under George W. Bush, the Strategic and Economic Dialogue of the Obama administration, and then ambitious plans for “four pillars” of talks during the first Trump administration, which quickly collapsed. The new trade mechanism will be led by the same participants – Greer and Bessent on the U.S. side, and He on the Chinese side – with the possibility for working-level talks as well. The changes are supposed to take effect by May 14. The pause on tariffs freezes the trade war that escalated on April 2, with the Trump administration's announcement of reciprocal tariffs on a wide swath of U.S. trading partners. China was initially subject to 34 percent tariffs, but after it retaliated in kind, Trump quickly escalated. After several rounds of tit-for-tat escalations, U.S. tariffs on Chinese imports ballooned to 145 percent and China's tariffs on U.S. goods reached 125 percent. The Geneva deal thus represents a substantial easing of the tariffs, but not back to the pre-April 2 level. The White House statement gushed that the “initial trade deal with China… reduces tariffs, ends retaliation, and sets Americans on the path for truly free, fair trade.” But in effect, all the “deal” does is reduce tariffs to “only” 10 percent – which is still 10 percent higher than April 1, 2025. Despite the claimed victory from the Trump administration, China made no new commitments to address allegations of dumping or illegal subsidies for its manufacturers. Instead, any structural rebalancing was put off to be discussed under the new mechanism – a process that has been continuing for over 20 years, which little results. In essence, the draw-down reflects both sides realizing that they stand to lose out in a trade war. In the joint statement issued by China and the United States following their talks, both sides recognized “the importance of their bilateral economic and trade relationship to both countries and the global economy” and “the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship.” Now both Washington and Beijing are turning to the all-important task of saving face. The Trump administration issued no less than four separate press releases on the “historic trade win,” ignoring the fact that China made no new commitments other than walking back the retaliatory tariffs put in place since April 2. China was much more circumspect. A Foreign Ministry spokesperson refused to provide any comment on the talks, directing reporters to refer to the joint statement and the official readout. In his press conference, He said “substantial progress” had been made but stopped far short of declaring victory. China framed the situation as the U.S. walking back its astronomical tariff increases, and Beijing reducing its retaliatory measures in return, but acknowledged the situation is far from settled. A Ministry of Commerce spokesperson called on the United States to “thoroughly correct the wrong practice of unilateral tariff increases.” The cool reception is in keeping with Beijing's attitude that it could afford to wait out the Trump administration on the trade war. With U.S. media reporting widely on sharply reduced port activity and looming shortages of goods, with commensurate price hikes, China likely felt confident going into the Geneva talks.