The U.S. and China have agreed to substantially lower some of their tariffs on two-way trade for 90 days while they work to negotiate a trade agreement.
According to information from the White House, the U.S. will lower the “reciprocal” tariff it is imposing on imports from China under the International Emergency Economic Powers Act from 125 percent to 10 percent and China will lower its retaliatory tariffs on imports from the U.S. from 125 percent to 10 percent. These suspensions will take place by May 14 and remain in effect for at least 90 days.
Also by May 14 China will “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.”
It is important to note that all U.S. imports from China will remain subject to applicable most-favored-nation duty rates, an IEEPA tariff of 20 percent imposed due to concerns about shipments of fentanyl, and either the IEEPA reciprocal tariff of 10 percent or a Section 232 tariff of 25 percent (if the products are subject to such tariffs). Many imports from China will also still be subject to longstanding Section 301 tariffs of 7.5 to 100 percent.
However, the White House appeared to suggest that the IEEPA fentanyl tariffs could be lifted at some point by asserting that the U.S. and China “will take aggressive action to stem the flow of fentanyl and other precursors from China to illicit drug producers in North America.”
The two sides also plan to “establish a mechanism to continue discussions about economic and trade relations.” While no further details were provided, the White House announcement did reference the U.S.’ goods trade deficit with China, which could indicate a focus on increasing Chinese imports of U.S. goods and/or decreasing U.S. imports of Chinese goods. A report from the Congressional Research Service notes that China fell short by 60 percent of the commitment it made as part of the Phase One bilateral trade agreement signed in 2020 to increase purchases of U.S. goods and that Treasury Secretary Scott Bessent, who will co-lead the coming negotiations on the U.S. side, said during his confirmation hearings earlier this year that he intends to enforce that commitment.
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