The U.S. and China have agreed to temporarily de-escalate their trade conflict, moving forward with a 90-day suspension of respective tariffs, The New York Times reported May 12.
Here are five more things to know:
- Under the agreement, the U.S. will reduce tariffs on Chinese imports to 30%, down from a recent levy of 145%. China also said it will lower its import duty on American goods to 10% from 125%. The suspension is set to last for 90 days while talks continue.
- Despite prior claims that tariffs would remain on China until major concessions are made, President Donald Trump stepped back from the steep tariffs on the country, stating “We’re not looking to hurt China.”
- Talks between the countries have not yielded substantial concessions. Mark Williams, chief Asia economist for Capital Economics, called the move in a research note “another substantial retreat from the Trump administration’s aggressive stance,” making mention of the absence of currency or trade imbalance commitments, the Times reported.
- U.S. and Chinese officials said future negotiations will involve Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer and Chinese Vice Premier He Lifeng. Mr. Bessent and Mr. Greer said both countries had discussions around U.S. demands that China crack down on trafficking of ingredients for fentanyl.
- President Trump initially imposed a 20% tariff on Chinese exports, citing China’s failure to curb fentanyl trafficking. That tariff remains in place, along with a 10% baseline tariff on nearly all U.S. trading partners. By the end of President Trump’s first term in office and during the Biden administration, the average U.S. tariff on Chinese goods was around 19%.
