Historic U.S. – China Trade Agreement Announced

Historic U.S. – China Trade Agreement Announced

President Donald J. Trump has announced a significant 90-day trade agreement with China, following successful negotiations in Geneva, Switzerland. This deal aims to reduce tariffs, eliminate retaliatory measures, and set the stage for future discussions on market access for American exports.  You can view the entire fact sheet issued by Whitehouse.gov Fact Sheet: President Donald J. Trump Secures a Historic Trade Win for the United States – The White House  and the Executive Order Modifying Reciprocal Tariff Rates to Reflect Discussions with the People’s Republic of China – The White House

Key Terms of the Agreement

Tariff Reductions: Both the United States and China will lower tariffs by 115 percent. Specifically, U.S. tariffs on Chinese goods will decrease from 145% to 30%, while China’s tariffs on U.S. goods will drop from 125% to 10%.

Suspension of Reciprocal Tariffs: The U.S. will suspend its 34% reciprocal tariff imposed on April 2, 2025, for 90 days, retaining a 10% tariff during this period. China will also suspend its initial 34% tariff on U.S. goods announced on April 4, 2025, for 90 days, maintaining a 10% tariff during the suspension.

Retention of Baseline Tariffs: Both nations will maintain a 10% baseline tariff on each other’s goods, aiming to encourage domestic production and strengthen supply chains.

Elimination of Retaliatory Measures: China will remove retaliatory tariffs and non-tariff countermeasures imposed from April 4, 2025. The U.S. will remove additional tariffs imposed on China on April 8 and 9, 2025, but retain all duties imposed prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs, and tariffs related to the fentanyl national emergency.

Commitment to Future Discussions: Both countries have agreed to establish a mechanism for ongoing discussions to address trade imbalances and open market access for American exports.

The United States and China have committed to addressing the fentanyl crisis by taking aggressive actions to stem the flow of fentanyl and other precursors from China to illicit drug producers in North America. Both countries have emphasized the importance of a balanced and fair-trade relationship, aiming to avoid economic decoupling and pursue more balanced trade. 

As the 90-day suspension period progresses, both nations will be under pressure to negotiate a more comprehensive agreement that addresses underlying issues such as industrial policy, intellectual property concerns, and investment restrictions. The outcome of these discussions will likely shape the future of U.S.-China trade relations.