US and China Reach Temporary Tariff Truce Lowering Rates to 10 Percent After Months of Escalating Trade Tensions
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US and China Reach Temporary Tariff Truce Lowering Rates to 10 Percent After Months of Escalating Trade Tensions
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Just weeks ago, the United States and China reached a temporary truce after a dramatic series of tariff escalations earlier this spring. On May 12th, after weekend negotiations in Geneva, President Trump and Chinese officials agreed to lower reciprocal tariffs to a 10 percent baseline, a sharp decrease from the record highs seen earlier this year. According to a White House fact sheet, both countries agreed to eliminate most of the dramatic retaliatory measures imposed since April, with each side pledging to suspend an additional 24 percent effective tariff for an initial period of 90 days. This means that, for at least the next few weeks, most US products entering China and Chinese goods entering the US face a 10 percent tariff, offering some relief to global supply chains and importers after months of volatility.
These changes come on the heels of a rapid-fire tariff war that reached fever pitch in April and early May. Following an April 2nd executive order, the US imposed a baseline 34 percent tariff on most imports from China, which Beijing matched in kind. The White House then raised tariffs several times, ultimately peaking at 125 percent on Chinese goods by April 9th. China tracked these increases closely, at one point raising its own tariffs to 125 percent on US products. Both governments also took sector-specific actions: for example, the US doubled Section 232 tariffs on steel and aluminum from China to 50 percent as of June 4th, and China imposed new anti-dumping duties, such as a 74.9 percent rate on certain engineering plastics.
While the May truce dramatically reduced tariff rates, the situation remains fragile. President Trump, speaking on Truth Social, made it clear that the 10 percent minimum base tariff on Chinese goods is “here to stay.” The White House has also highlighted its authority to reimpose or increase tariffs quickly if negotiations sour or if China backslides on commitments regarding fentanyl, intellectual property, or rare earth exports. Chinese officials have been clear that they do not want a trade war but are prepared to "fight to the end" should the US resume escalation.
Industry reaction has been mixed. American manufacturers and retailers welcomed the tariff pause but warn that uncertainty is causing supply chain disruptions, price fluctuations, and difficulties in long-term planning. Meanwhile, experts caution that the 90-day window could close without further progress, potentially reigniting the tariff spiral.
That wraps up today's episode of China Tariff News and Tracker. Thanks for tuning in, and don’t forget to subscribe for the latest updates on this fast-changing story. This has been a quiet please production, for more check out quiet please dot ai.
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