[CTC] U.S. and China Agree to Temporarily Slash Tariffs

[Arthur Stamoulis]

*NYT article and White House “fact sheet” below...*


https://www.nytimes.com/2025/05/12/business/china-us-tariffs.html
U.S. and China Agree to Temporarily Slash Tariffs in Bid to Defuse Trade War

The 145 percent U.S. tariff on Chinese goods will come down to 30 percent
for 90 days, while the two sides continue talks aimed at resolving their
differences.

The United States and China said Monday they reached an agreement to
temporarily reduce the punishing tariffs they have imposed on each other
while they try to defuse the trade war threatening the world’s two largest
economies.

In a joint statement, the countries said they would suspend their
respective tariffs for 90 days and continue negotiations they started this
weekend. Under the agreement, the United States would reduce the tariff on
Chinese imports to 30 percent from its current 145 percent, while China
would lower its import duty on American goods to 10 percent from 125
percent.

“We concluded that we have a shared interest,” said Treasury Secretary
Scott Bessent at a news conference in Geneva where U.S. and Chinese
officials met over the weekend. “The consensus from both delegations is
that neither side wanted a decoupling,” he said.

China said it will suspend or revoke countermeasures adopted in retaliation
for escalating tariffs. In early April, the Chinese government had ordered
restrictions on the export of rare earth metals and magnets, critical
components used by many industries, including automakers, aerospace
manufacturers and semiconductor firms.

Mr. Bessent said the two countries may discuss purchase agreements of
American goods by the Chinese government. Such a deal could help narrow the
American trade deficit with China.

The agreement, for now, breaks an impasse that had brought much trade
between China and the United States to a halt. Many American businesses had
suspended orders, holding out hope that the two countries could strike a
deal to lower the tariff rates. Economists have warned that the trade
dispute will slow global growth
<https://www.nytimes.com/2025/04/22/us/politics/imf-world-economic-outlook.html>,
fuel inflation and create product shortages, potentially tipping the United
States into a recession.

“We tried to identify shared interest,” Mr. Bessent said on CNBC on Monday.
“We came with a list of problems that we were trying to solve, and I think
we did a good job on that.”

The Treasury secretary placed blame on the Biden administration for failing
to honor its commitments to the trade deal that Mr. Trump reached with
China during his first term. He said that agreement would be a starting
point for the current round of talks, which are expected to continue in the
coming weeks toward a more “fulsome agreement.”

Chinese factories also experienced a sharp decline in export orders to the
United States, heaping additional pressure on a sluggish economy. Chinese
producers looked to expand trade to Southeast Asia and other regions to
circumvent the U.S. tariffs.

Mr. Bessent said the tariffs had effectively created an embargo, something
neither side wanted. The two countries said that ongoing negotiations will
involve Mr. Bessent, Mr. Greer and He Lifeng, China’s vice premier for
economic policy, who led the weekend talks for the Chinese.

In a research note, Mark Williams, chief Asia economist for Capital
Economics, said the agreement was “another substantial retreat from the
Trump administration’s aggressive stance,” because it does not include any
commitments by China on its currency or trade imbalances. He also noted
that there is no guarantee that a 90-day truce will give way to a lasting
agreement, especially if the United States continues trying to rally other
countries to limit trade with China.

While a temporary reprieve from the shockingly high tariffs is cause for
celebration for businesses in both countries, the repercussions will  linger.
Businesses will likely encounter a flood of pent-up demand, leading to
soaring transport prices, as companies race to schedule shipments during
the 90-day negotiating window to take advantage of the lower tariff rates.

Global markets jumped on the announcement. The benchmark index in Hong Kong
surged 3 percent, about the same amount as S&P 500 stock futures.

Zhiwei Zhang, the president and chief economist of Pinpoint Asset
Management, an investment firm in Hong Kong, called the agreement a “good
starting point” for both countries.

“From China’s perspective, the outcome of this meeting is a success, as
China took a tough stance on the U.S. threat of high tariffs and eventually
managed to get the tariffs down significantly without making concessions,”
he said.

Mr. Bessent and Jamieson Greer, the United States Trade Representative,
said the two countries had substantive discussions on U.S. demands that
Beijing crack down on the trafficking of the chemical ingredients used to
make fentanyl. Mr. Bessent said the Chinese “understood the magnitude” of
the fentanyl crisis in the United States and that there is a “positive path
forward.”

Mr. Trump initially added a 20 percent tariff to Chinese exports, accusing
the country of not doing enough to stop the flow of fentanyl to the United
States. That punitive tariff remains in place. The 10 percent “base line”
tariff on nearly every U.S. trading partner, including China, also remains
in place.

Mr. Greer said the negotiations were underscored by “mutual understanding
and mutual respect,” but noted that China was the only country to retaliate
against the United States after President Trump imposed so-called
reciprocal tariffs on dozens of countries last month.

Last month, the Trump administration announced a 90-day pause on the
reciprocal tariffs that it implemented on most trading partners, with the
exception of China. The White House has been racing to strike trade deals
before the deadline expires in early July.

The Trump administration has accused China of unfairly subsidizing key
sectors of its economy and flooding the world with cheap goods. Mr. Trump
has said China has been “ripping off” the United States for decades with
unfair trade practices that have decimated America’s manufacturing sector
and cost the country jobs.

Wang Wen, dean of the Chongyang Institute for Financial Studies at Renmin
University in Beijing, said the agreement demonstrated the desire for both
countries to avert the “worst-case scenario.” He said that China “is
better” at dealing with the tempo and style of the second Trump presidency
compared to how it dealt with the first Trump term.

In laying out the agreement, Mr. Bessent and Mr. Greer were careful not to
antagonize China. Instead, they placed most of the blame for the trade war
on the Biden administration, accusing it of neglecting the trade imbalance.

Mr. Bessent suggested that the two countries could help each other by
balancing their economies, saying America could restore manufacturing while
China could scale back overproduction in its manufacturing sector.

The two sides have sparred in public in recent weeks. The White House
repeatedly said it was speaking with Chinese officials, while Beijing
denied that such talks were taking place.

Beijing initially took a hard line to Mr. Trump’s punitive tariffs. Last
month, Mao Ning, a senior Chinese Foreign Ministry spokeswoman, posted on X
a video of a speech that Mao Zedong made during the Korean War — known in
China as the War to Resist U.S. Aggression and Aid Korea — in which he
declared, “No matter how long this war is going to last, we’ll never yield.”

China has carefully framed its involvement in the Geneva negotiations not
as a concession to Mr. Trump’s tariffs, but as a necessary step to avoid
further escalation. China’s Ministry of Commerce said the agreement was “in
the interests of both countries and the common interests of the world" and
that it hoped that the United States would “continue to work with China to
meet each other halfway.”

Since the tariffs were announced, China has taken many punitive measures
against the United States. It suspended imports of sorghum, poultry and
bonemeal from American companies and added 27 firms to the list of
companies facing trade restrictions.

On Monday, even as China agreed to roll back punitive measures it has
imposed over the past month, multiple Chinese agencies, including the
Ministry of Commerce and the Ministry of State Security, met to discuss how
to strengthen export controls of strategic minerals.

In a statement, the European Chamber of Commerce in China said it was
“encouraged” by the announcement, but that “uncertainty remains" because
the tariffs are only temporarily suspended.

President Jens Eskelund, president of the European Chamber, said it “hopes
to see both sides continue to engage in dialogue to resolve differences,
and avoid taking measures that will disrupt global trade and result in
collateral damage for those caught in the crossfire.”

Before the weekend trade discussions, Mr. Trump seemed to extend an olive
branch by suggesting he would be open to lowering the tariffs to 80
percent. He wrote on Truth Social on Saturday that the talks were a
breakthrough: “A total reset negotiated in a friendly, but constructive,
manner.”




https://www.whitehouse.gov/fact-sheets/2025/05/fact-sheet-president-donald-j-trump-secures-a-historic-trade-win-for-the-united-states/

President Donald J. Trump Secures a Historic Trade Win for the United States
The White House
May 12, 2025

*SECURING ANOTHER HISTORIC DEAL:* Today, on the heels of the brand-new deal
with the United Kingdom, President Donald J. Trump reached an agreement
with China to reduce China’s tariffs and eliminate retaliation, retain a
U.S. baseline tariff on China, and set a path for future discussions to
open market access for American exports.

   - Today, the United States issued the first joint statement on trade in
   many years with China after successful negotiations over the weekend in
   Geneva, Switzerland.
   - Both parties affirmed the importance of the critical bilateral
   economic and trade relationship between both countries and the global
   economy.
   - For too long, unfair trade practices and America’s massive trade
   deficit with China have fueled the offshoring of American jobs and the
   decline of our manufacturing sector.
   - In reaching an agreement, the United States and China will each lower
   tariffs by 115% while retaining an additional 10% tariff. Other U.S.
   measures will remain in place.
   - Both sides will take these actions by May 14, 2025.
   - This trade deal is a win for the United States, demonstrating
   President Trump’s unparalleled expertise in securing deals that benefit the
   American people.

*CHINESE ACTIONS:* China will remove the retaliatory tariffs it announced
since April 4, 2025, and will also suspend or remove the non-tariff
countermeasures taken against the United States since April 2, 2025.

   - China will also suspend its initial 34% tariff on the United States it
   announced on April 4, 2025 for 90 days, but will retain a 10% tariff during
   the period of the pause.

*AMERICAN ACTIONS:* The United States will remove the additional tariffs it
imposed on China on April 8 and April 9, 2025, but will retain all duties
imposed on China prior to April 2, 2025, including Section 301 tariffs,
Section 232 tariffs, tariffs imposed in response to the fentanyl national
emergency invoked pursuant to the International Emergency Economic Powers
Act, and Most Favored Nation tariffs.

   - The United States will suspend its 34% reciprocal tariff imposed on
   April 2, 2025 for 90 days, but retain a 10% tariff during the period of the
   pause.
   - The 10% tariff continues to set a fair baseline that encourages
   domestic production, strengthens our supply chains and ensures that
   American trade policy supports American workers first, instead of
   undercutting them.
   - By imposing reciprocal tariffs, President Trump is ensuring our trade
   policy works for the American economy, addresses our national emergency
   brought on by our growing and persistent trade deficit, and levels the
   playing field for American workers and producers.
   - Unlike previous administrations, President Trump took a tough,
   uncompromising stance on China to protect American interests and stop
   unfair trade practices.

*WORKING TOWARDS A REBALANCING:* When these changes come into effect, both
nations agreed to establish a mechanism to continue important discussions
about trade and economics.

   - The U.S. goods trade deficit with China was $295.4 billion in 2024—the
   largest with any trading partner.
   - Today’s agreement works toward addressing these imbalances to deliver
   real, lasting benefits to American workers, famers, and businesses.
   - As our nations continue these discussions, China will be represented
   by He Lifeng, Vice Premier of the State Council.
   - The United States will be represented by Scott Bessent, Secretary of
   the Treasury, and Jamieson Greer, United States Trade Representative.

*ADDRESSING THE FENTANYL CRISIS:* 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.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
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