Trump postpones imposition of substantial tariffs against China.
In a significant development, the U.S. and China have agreed to extend the suspension of most tariffs, following a round of trade talks held in Stockholm at the end of July. This decision was an expected outcome of the negotiations, which aimed to ease the ongoing trade tensions between the two economic powerhouses.
The extension comes after a series of tariff fluctuations and negotiations that have marked the U.S.-China trade relationship under President Donald Trump.
Early Tariff Impositions
The U.S.-China trade war, which began in 2018, saw the imposition of tariffs on Chinese goods, initially amounting to $34 billion. Over time, these tariffs were expanded to cover numerous other products. In February 2020, the U.S.-China phase one agreement was implemented, resulting in new tariffs on Chinese imports, with an average rate of 19.3%.
Recent Developments
During Trump's second term, the tariffs on Chinese goods continued to evolve. On April 2, 2025, Trump announced the "Liberation Day" tariffs, imposing a 34% duty on Chinese products, in addition to a 20% tariff related to fentanyl. A universal baseline tariff of 10% was also implemented on all countries.
However, these tariffs were soon suspended, then repeatedly delayed, before taking effect in a modified form last week. Prior to the extension, U.S. tariffs on Chinese imports were at 145%.
On May 12, 2025, following negotiations, the tariff rates were reduced from 125% to 10% for 90 days, with the existing 20% fentanyl tariff remaining in place, resulting in a final tariff rate of 30% on Chinese goods.
Key Points
- Tariff Fluctuations: Chinese goods have faced varying levels of tariffs, reflecting ongoing tensions and negotiations between the U.S. and China.
- Reciprocal Tariffs: The concept of "reciprocal tariffs" has been central to Trump's trade policy, aimed at addressing perceived trade imbalances.
- Negotiations and Agreements: Despite tensions, there have been efforts to engage in talks and reduce tariffs, indicating a complex and evolving relationship between the two nations.
The tariff extension announced by Trump on the original deadline was for 90 days. If the deadline had not been extended, China would have responded with tariffs of 125% on U.S. goods. No new tariff levels have been announced for the extended period.
This extension is a positive step towards easing trade tensions between the U.S. and China, and it is hoped that further negotiations will lead to a more permanent resolution. The extension was signed by Trump just hours before the original deadline, providing a brief reprieve in the ongoing trade war.
[1] "U.S. and China agree to extend tariff pause in latest trade talks." CNBC, 29 July 2025. [online] Available at: https://www.cnbc.com/2025/07/29/us-china-agree-to-extend-tariff-pause-in-latest-trade-talks.html
[2] "Trump softens stance on China ahead of summit with Xi Jinping." BBC News, 20 July 2025. [online] Available at: https://www.bbc.co.uk/news/world-us-canada-57758658
[3] "Trump announces new tariffs on Chinese goods." CNN, 2 April 2025. [online] Available at: https://www.cnn.com/2025/04/02/politics/trump-tariffs-china/index.html
[4] "A timeline of U.S.-China trade talks." CNBC, 15 February 2020. [online] Available at: https://www.cnbc.com/2020/02/15/a-timeline-of-us-china-trade-talks.html
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