Highlights from US-China Trade Talks

📅 May 14, 2025
✍️ Written by Arendse Huld | Posted by China Briefing
⏱ Reading Time: 7 minutes

🧊 Breakthrough in US-China Trade Tensions

In a major breakthrough, China and the US have struck a pivotal deal to slash reciprocal tariffs, cooling trade tensions and signaling a potential thaw in the ongoing trade war. With further talks on the horizon, a broader deal could be within reach—though major sticking points remain.

🔄 Update: May 13, 2025 – Executive Order Changes

• The Trump administration reduced the de minimis tariff rate from 120% to 54%.
• The US$100 per-item fee (effective May 2) remains, but the June 1 increase to US$200 was canceled.
• Despite the tariff cut, small parcel imports under US$800 remain significantly costlier than pre-2025 duty-free levels.

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🤝 US-China Joint Statement – May 12, 2025

China’s Ministry of Commerce (MOFCOM) and the US White House announced:

• Reciprocal tariffs to drop from 125% → 10% for 90 days (effective May 14)
• US baseline tariff rate on Chinese goods to settle at 30%
• China to suspend/remove non-tariff countermeasures
• Bilateral mechanism to continue trade talks

📌 What Was Agreed?

• Reciprocal tariffs imposed on April 2 and April 4 will be reduced to 10%.
• The initial 125% peak emerged from tit-for-tat escalations, beginning at 34%.
• The 90-day reduction resets the tariff to 10% (minimum baseline) until further notice.

🔍 Business Impact

Supply chains remain strained. Reengineering and continuity planning is advised.

🧾 Clarifying the De Minimis Tariff Policy

• The de minimis exemption (for packages < US$800) ended April 2.
• Tariff was raised to 120%, then set to US$100/item (May 2), US$200/item (June 1, canceled).
• Now reset to 54% + US$100/item under new executive order.

🔧 China’s Concessions on Non-Tariff Countermeasures

From April 2 onwards, China had responded with various actions, including:

• April 4: MOFCOM restricted exports of seven rare earth elements
• April 4 & 9: US firms added to export control list and unreliable entities list
• SAMR antitrust probe into DuPont China

The new agreement commits China to suspend or remove these measures.

❌ What Was NOT Agreed?

• 20% “fentanyl tariffs” from Feb/March remain in place (per Ambassador Greer).
• China retains retaliatory tariffs on:
  • 15%: coal, LNG, chicken, wheat, corn, cotton
  • 10%: crude oil, pork, beef, soybeans, fruits, dairy
• Other unresolved issues:
  • US port fees on Chinese vessels (effective later this year)
  • Section 301/232 tariffs, steel/aluminum (25%), auto tariffs, and tech tariffs remain.

📉 Is a Broader Trade Deal Possible?

The joint statement establishes a mechanism for continued talks, led by:

• China: Vice Premier He Lifeng
• US: Representative Greer & Treasury Secretary Bessent

🧮 Trade Deficit Challenge

Trump administration cites the $1.2 trillion trade deficit as a national emergency. Despite previous commitments (e.g., 2020 Phase One Deal), China failed to meet purchasing targets.

🔎 Related Reading

📍 Mapping Tariff Risk: Which Chinese Cities Are Most Exposed to Foreign Trade?

✨ Looking Ahead

While a 10% baseline tariff is expected to remain, the US is signaling flexibility in some trade talks, as seen in the UK-US deal earlier this month.

However, with core political concerns like the trade deficit unresolved, comprehensive reconciliation will require deeper cooperation.

🗞️ This article was first published on May 12, 2025, and last updated on May 14, 2025.

🔗 Source: China Briefing – Original Article

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