On May 12, 2025, the United States and China announced a bilateral agreement to reduce tariffs and ease trade tensions. This development follows negotiations held in Geneva, Switzerland, and is intended to address ongoing trade imbalances and foster continued dialogue between the two nations.
Key Provisions
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Tariff Reductions: Both countries have agreed to lower certain tariffs by 115%, while maintaining a baseline 10% tariff on applicable goods. These changes are scheduled to take effect by May 14, 2025.
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Suspension of Additional Tariffs: The United States will suspend additional tariffs imposed on China in early April 2025. However, existing tariffs established prior to April 2, 2025—including those under Sections 301 and 232, as well as tariffs related to the fentanyl national emergency—will remain in place.
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China’s Reciprocal Actions: China will suspend its 34% tariff on U.S. goods announced on April 4, 2025, for a 90-day period, retaining a 10% tariff during this time. Additionally, China will remove other retaliatory tariffs and non-tariff measures implemented since early April.
- Establishment of Ongoing Dialogue: Both nations have agreed to continue discussions aimed at rebalancing trade relations. The United States will be represented by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, while China will be represented by Vice Premier He Lifeng.
Implications for Businesses
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Trade Operations: Companies engaged in U.S.–China trade may experience changes in tariff-related costs. It is advisable to review current supply chains and assess the impact of the adjusted tariff rates.
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Regulatory Compliance: Businesses should stay informed about the evolving trade policies and ensure compliance with all applicable regulations during this 90-day period and beyond.
- Strategic Planning: The temporary nature of this agreement underscores the importance of strategic planning to mitigate potential risks associated with future trade policy changes.
Next Steps
We recommend that clients:
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Review Supply Chains: Analyze the impact of tariff adjustments on your supply chain and consider alternative sourcing strategies if necessary.
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Monitor Policy Developments: Stay updated on further negotiations and policy changes that may affect international trade dynamics.
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For detailed information, please refer to the official White House fact sheet: Fact Sheet: President Donald J. Trump Secures a Historic Trade Win for the United States.
- Consult Trade Experts: Engage with trade compliance professionals to navigate the complexities of the current trade environment effectively.
Contact Information
For further assistance or inquiries related to this development, please contact your Buckland representative.
This bulletin is intended for informational purposes only and does not constitute legal or professional advice.