US and China defuse their trade conflict, for now
The US and China have agreed to significantly reduce tariffs on imports from each other for 90 days
Commerzbank Economic Research
05/12/2025
The agreement...
The US and China negotiated in Switzerland over the weekend and agreed on a temporary basis on a significant reduction in the tariffs imposed on each other.
In detail , the following tariffs will apply for an initial period of 90 days from May 14:
- The US will reduce the “reciprocal” tariff imposed on China from 34% to 10%. In addition, the tariffs of 20% imposed in connection with the import of fentanyl into the US are maintained. All other general tariffs imposed in the meantime will be suspended. This means overall that tariffs of 30% will be levied on imports from China to the US.
- In return, China will reduce its tariffs on US products to 10% and promises to suspend the non-tariff trade restrictions imposed after April 2. This should also mean that export restrictions on rare earths will be lifted for the time being.
Compared with the status quo before Trump took office, the applicable tariffs would still be significantly higher. However, they would no longer reach the prohibitive levels of 125% (Chinese tariffs on US products) and 145% (US tariffs on Chinese products), which would have brought bilateral trade to a complete standstill.
For full text see attached PDF-Version.
