Earlier this year, the US and China found themselves locked once again in a trade war. President Donald Trump reintroduced extremely high tariffs on Chinese goods shortly after returning to office. These new tariffs, some reaching as high as 145%, targeted a wide range of products, from electronics to raw materials.
In response, China retaliates to Trump’s tariffs with counter-tariffs on US goods of as much as 125%, striking back at U.S. exports. The tit-for-tat actions quickly reignited fears of a full-blown trade conflict between the world’s two enormous economies.
But just a few weeks later, both sides hit pause. After talks in Geneva, U.S. and Chinese officials announced a temporary deal that would ease many of the recently imposed tariffs. For now, US China tariffs truce is being called a 90-day “suspension,” with more negotiations planned.
US-China Tariffs Truce: What’s in the New Deal?
The most important part of the agreement is a sharp reduction in tariffs from both countries, but only for a limited time.
- U.S. tariffs on Chinese goods will drop from 145% to 30%.
- China’s tariffs on U.S. goods will fall from 125% to 10%.
This suspension will last for 90 days. After that, if talks go well, more reductions may follow. But if progress stalls, the tariffs could be brought back just as quickly.
However, not all tariffs are going away. The U.S. will keep a 20% tariff on some Chinese tech exports, especially semiconductors, citing national security. China is also imposing duties on specific American imports.
So, while this is a big shift, it’s not a full trade peace — at least not yet.
Why It Happened Now?
There are clear reasons why both countries were ready to cool things down.
In China, the economy has shown mixed signals. While factories are producing steadily, retail sales have been slow. Consumer confidence is still low, and some companies are starting to shift operations out of the country. Ongoing tariffs were only adding more pressure.
In the U.S., the tariffs were also causing economic strain. Prices were rising, supply chains were disrupted, and businesses were growing more nervous. Even Wall Street was feeling it — U.S. markets dropped after the tariff hikes, and rating agency Moody’s even issued a credit downgrade warning.
For both countries, pausing the fight made sense, at least in the short term.
How Did Markets React?
The trade truce gave markets a boost. U.S. stock indexes jumped after the announcement:
Investors saw the deal as a sign that the worst might be over, at least for now. Lower tariffs could mean lower costs for companies and better prices for consumers.
But many experts remain cautious. They know that this truce has an expiration date. Without more progress, the tariffs could be back in just three months.
Businesses Still Don’t Feel Secure
Even with the new deal, many global companies are still unsure about the future. Years of unpredictable tariffs have made it risky to rely heavily on either U.S. or Chinese trade policies.
Big manufacturers like Apple and VTech are already repositioning parts of their supply chains out of China. Countries like Vietnam, India, and Mexico are becoming new hubs for factories that once operated in China.
These moves are about stability. Businesses want long-term certainty, and a 90-day tariff break doesn’t provide that.
The Bigger Picture: What’s Next?
This current deal is just the start of a longer process. The 90-day pause gives both countries time to work out a bigger trade agreement — but that won’t be easy.
There are still major issues to tackle, including:
- How China treats U.S. companies.
- Concerns over intellectual property rights.
- National security issues around technology exports.
None of these will be solved overnight. That’s why both sides are calling this a temporary “reset” rather than a full solution.
US China Tariffs Truce: The Global Ripple Effect
The U.S.-China relationship affects more than just the two countries involved. When tariffs rise, global supply chains get disrupted, and prices go up for businesses and consumers around the world.
Smaller countries that trade with both nations often get caught in the middle. If this US China tariffs truce holds and leads to more open trade, global markets could benefit. But if talks fail, another round of tariffs could hit hard, especially in industries like electronics, automotive, and agriculture.
Final Thoughts: A Break, Not a Breakthrough
The 2025 U.S.-China tariff suspension is a relief for many, but it’s not the end of the conflict. It’s a temporary pause to give both sides room to talk — and hopefully, compromise.
For now, consumers might see slightly lower prices, and businesses may get some breathing room. But the uncertainty isn’t over. The real test will be what happens after 90 days.
Will this fragile US China Tariffs truce lead to real change, or is it just another brief break in a long, rocky relationship? Only time will tell.
For more China US tariff news, stay tuned on Route Shopping for the latest developments!
Frequently Asked Questions (FAQs)
Has the US and China made a trade deal?
Yes, the US and China made a trade war deal as cited on China tariffs Fox News, and other platforms. With China tariffs on US and US tariffs on China in early 2025, the trade war escalated. However, the two countries have now made a deal to reduce tariffs on each other for 90 days.
Does China have tariffs on US cars?
Yes, China has tariffs on US cars, especially those with big engines. The trade war has led China to impose an additional 10% tariff on US cars.
Does the US still have tariffs?
Yes, the US still has tariffs as of 2025. The average tariff rate is significant; it’s high in countries ike China, especially after Trump got his presidency back. Other countries include Mexico and Canada.
What were the tariffs on China before 2025?
The tariffs on China by the US gradually increased from 2018, according to the US China tariffs timeline, and under Biden’s government, the rates increased to 100% for electric vehicles, 50% for solar cells, and 25% on EV batteries, critical minerals, steel, aluminum, and ship-to-shore cranes. It further increased to 145% under the Trump gove, but recently, China evaluates U.S. requests to negotiate tariffs and both countries have decided to decrease tariffs on each other for 90 days.