The U.S. administration announced a 90-day trade truce between the United States and China on Monday, May 12, following a meeting of the parties in Switzerland over the weekend. The two countries agreed to reduce tariffs by 115 percentage points, while continuing bilateral trade negotiations. This will reset tariff rates to 30% on Chinese goods entering the United States and 10% on American goods entering China. American sector-specific tariffs, such as those imposed on steel and auto parts, will remain unchanged, as will the retaliatory Chinese tariffs (such as those imposed on American agricultural products) that were enacted following the initial 20% U.S. tariffs (related to fentanyl).
The significance of this matter: The United States imported goods worth $439 billion from China in 2024, more than any other economy except Mexico. Tariff rates between the United States and China have escalated to over 100% following the announcement of "Liberation Day" on April 2.
