On May 12, 2025, the United States and the People’s Republic of China agreed to temporarily suspend most tariffs for 90 days. The joint statement released by the Trump Administration states both countries will slash existing tariff rates and work towards a longer team deal over the next 90 days:
- CHINESE ACTIONS: China will decrease tariffs to 10%. China will remove retaliatory tariffs it announced on 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 suspend its 34% reciprocal tariff imposed on April 2, 2025 for 90 days, but retain a 10% tariff during the period of the pause. When combined with the 20% duty on Chinese imports relating to fentanyl, total tariffs stand at 30%. Treasury Secretary Scott Bessent and United States Trade Representative Jamieson Greer will continue to lead negotiations for the United States.
The détente has led to a flurry of bookings for containers to the United States from China. In the week beginning May 12, 2025, when the trade truce was announced, bookings for containers to the United States from China more than doubled compared with the week before as the tariff rollback unleashed pent-up demand. Bookings surged to the equivalent of around 2.2 million 20-foot boxes, a level not seen in more than a year.
Consumer confidence also improved after the announcement, with The Conference Board announcing its consumer confidence index rose 12.3 points in May to 98, up from April’s 85.7, its lowest reading since May 2020.
The implementation and reduction of tariffs by the Trump Administration remains fluid and both countries are keeping continued negotiations under wraps. Gray Reed will continue to monitor the status of any future agreement for its impact on your business. As highlighted by my colleague J.P. Vogel, tariffs continue to have an outsized impact on global trade.
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