US and China agreed to a 90-day suspension during which US tariffs on most Chinese imports will come down to 30% from 145%
The temporary tariff reductions agreed by the US and China were much-welcomed by retailers, economists and investors, with several expecting it to be the beginning of the end of the trade war between the world’s two biggest economies.
Both countries agreed to a 90-day suspension during which US tariffs on most Chinese imports will come down to 30% from 145%. China will lower its import duties on American goods to 10% from 125%.
China would also halt some non-tariff trade measures it had taken in the wake of President Donald Trump’s levies. Beijing said it would ease export restrictions on rare earth minerals to the US, which are critical to batteries and other tech.
What happens after the 90-day suspension?
Treasury Secretary Scott Bessent said he seeks “a long-lasting and durable trade deal” with China. He pointed out several issues that still need discussing, like illicit fentanyl supplies to the US and heavy manufacturing subsidies Beijing gives its companies, driving job losses in American factories.
Meanwhile, several US businesses are expected to resume their shipments from China once the temporary suspension takes effect. They range from coffee makers, slushie machines, clothing racks, to even pencil wood. However, these imports still face higher duties than before Trump’s presidency, which could lead to price hikes.
Economists say the US–China truce on the tit-for-tat tariffs may reduce the risk of higher inflation and global trade uncertainty, but nothing is permanent yet.
President Trump is expecting a call with Chinese President Xi Jinping this week.