US and China Suspend 24% Tariffs for 90 Days in Trade Truce
The United States and China have reached an agreement to temporarily suspend the implementation of a 24% tariff on each other's goods for 90 days. According to the agreement, the US will cancel the tariffs imposed under Executive Orders 14259 and 14266, while China will also cancel its retaliatory tariffs on American goods. Both countries will retain a 10% base tariff. The agreement marks a significant development in the trade tensions between the two nations, which have been ongoing for several years.
12 May 2025
The US had previously imposed tariffs on Chinese goods, which led to China retaliating with its own tariffs on American goods. The suspension of the 24% tariff is a positive step towards resolving the trade dispute and comes after recent discussions between the two countries. Under the agreement, the US will modify the tariffs imposed on Chinese goods, including those from Hong Kong and Macau, with the 24% tariff suspended for 90 days. The remaining 10% tariff will be retained. Similarly, China will modify its tariffs on American goods, suspending the 24% tariff for 90 days and retaining the remaining 10% tariff.
The agreement also includes the cancellation of non-tariff countermeasures taken by China against the US. The two countries have agreed to establish a mechanism for further consultations on trade relations, with the Chinese side represented by Vice Premier He Lifeng and the US side represented by Treasury Secretary Scott Bensen and Trade Representative Jamison Greel. During this 90-day period, the two sides will establish a mechanism to continue negotiations on economic and trade relations. The talks can take place in China, the US, or a third country agreed upon by both parties.
The temporary suspension of the 24% tariff is a welcome move, as it will help to reduce trade tensions and promote economic cooperation between the two nations. The agreement is seen as a positive step towards resolving the trade dispute and promoting a more stable and sustainable trade relationship between the US and China. Although the trade tensions between China and the United States have shown signs of easing, the two countries still need to continue negotiations on economic and trade relations in the 90-day period.
The trade tensions between the two nations have been ongoing for several years, with the US and China imposing billions of dollars' worth of tariffs on each other's goods, causing concerns about the impact on the global economy. The joint statement released by China and the US acknowledged the importance of bilateral economic and trade relations to both countries and the global economy, and the need for a sustainable, long-term, and mutually beneficial relationship. The two sides expressed their commitment to taking measures to promote cooperation and avoid decoupling.
The temporary reprieve from the tariffs imposed by the United States and China is poised to have a significant impact on global trade. By suspending the 24% tariffs for 90 days, both countries are expected to see a reduction in the costs associated with the export and import of goods. This decrease in costs is likely to stimulate trade between the two nations, as the punitive measures that had previously hindered the exchange of goods will be put on hold. The suspension of the tariffs is anticipated to alleviate some of the uncertainty that has been plaguing the global economy, providing some much-needed stability, as businesses and investors will have a clearer understanding of the trade landscape, at least for the short term.
The pause in the tariffs could also have a ripple effect, influencing trade relationships between other countries. If the US and China can successfully negotiate a more permanent resolution to their trade disputes, it could set a positive precedent for global trade, promoting the idea that tariffs are not the most effective tool for resolving trade imbalances. Conversely, if the talks fail to yield a lasting agreement, the global economy may once again face the uncertainty of escalating trade tensions. The world watches as these two economic giants take a step back from the brink of further escalation, analyzing the implications of this temporary reprieve and speculating about the potential outcomes of the negotiations that lie ahead. The future of US-China trade relations remains uncertain, but the communication and negotiation between the two countries will be crucial in establishing a long-term agreement. The development of US-China trade relations will have a profound impact on the global economy, and the two countries need to continue strengthening communication and seeking mutually beneficial solutions to establish a stable trade relationship.
