U.S. and China Announce Landmark Trade Agreement

Trade Update • May 12, 2025

n a landmark development following high-level negotiations in Geneva, the United States and the People’s Republic of China have announced a joint agreement to reduce tariffs, eliminate recent retaliatory measures, and establish a forward-looking mechanism for continued economic dialogue.

The deal—hailed by both governments as a step toward a more balanced and reciprocal trade relationship—comes amid heightened global economic tensions and builds on the United States’ recent Economic Prosperity Deal with the United Kingdom.

Key Provisions of the Agreement

Both countries have committed to taking the below actions by May 14, 2025, aligning administrative, customs, and tariff systems accordingly.

U.S. Actions:

Tariff Suspension: The United States will suspend 24 percentage points of the 34% reciprocal tariff imposed under Executive Order 14257 of April 2, 2025, for a period of 90 days, retaining a baseline 10% tariff on imports from China, including goods originating in Hong Kong and Macau. As a result, the US will temporarily lower its tariffs on Chinese goods from 145% to 30%.

• Tariff Removals: Tariffs established under Executive Orders 14259 (April 8) and 14266 (April 9)—which further escalated duties on Chinese goods—will be fully removed.

• Retention of Other Tariffs: Section 301 and Section 232 tariffs, MFN duties, and tariffs imposed in connection with the fentanyl-related national emergency remain in force.

9903.01.63 (IEEPA Reciprocal) is suspended for 90 days – use the catch all of 9903.01.25 (10%). The IEEPA Fentanyl will still apply 9903.01.24 (20%). After the 90 days the 9903.01.63 (IEEPA Reciprocal) will come back into play at 34%.

China Actions:

• Retaliatory Tariff Suspension/Removal: China will likewise suspend 24 percentage points of its additional tariff (initially 34%) imposed since April 4, 2025 on U.S. goods for 90 days, retaining a 10% baseline during the suspension period. China will suspend or remove non-tariff countermeasures imposed since April 2, 2025. As a result, China will cut its tariffs on American imports from 125% to 10%.

• Non-Tariff Measure Withdrawal: China has committed to removing non-tariff countermeasures implemented since April 2, including restrictions affecting U.S. agricultural and technology exports.

Fact Sheet: President Donald J. Trump Secures a Historic Trade Win for the United States
Joint Statement on U.S.-China Economic and Trade Meeting in Geneva
Key Changes to Ad Valorem Duty Rate, Tariff Modifications and De Minimis for China

CBP Guidance

U.S. importers should expect forthcoming CBP guidance on implementation specifics related to:

• Suspension and application of the 10% baseline tariff on Chinese-origin goods under EO 14257.

• Product classification and entry instructions for goods previously subject to 34% tariffs.

• Confirmation of eligibility for retroactive duty adjustments on goods entered prior to May 14 but released after the effective date.

CBP is expected to issue an administrative notice this week outlining Harmonized Tariff Schedule (HTS) codes affected by the change and instructions for claim filing or refunds under the revised structure.

Strategic Significance

This agreement comes amid broader U.S. efforts to recalibrate trade imbalances. In 2024, the U.S. goods trade deficit with China stood at $295.4 billion, the highest with any trading partner. This action directly targets that imbalance while supporting:

• Domestic industry and manufacturing

• Supply chain resilience

• Job creation in critical sectors

President Trump underscored that the 10% baseline tariff serves as a strategic anchor for continued negotiations, preserving leverage to address persistent unfair trade practices while fostering conditions for reform. As part of the agreement, both nations also pledged to intensify joint efforts to combat the flow of illicit fentanyl and precursor chemicals from China to North America—aligning with broader U.S. enforcement under the International Emergency Economic Powers Act.

Marking the first formal bilateral trade agreement between the United States and China in years, the joint statement reflects a cautious easing of tensions and a mutual commitment to economic stability. With tariff suspensions now in motion and dialogue mechanisms established, the focus turns to implementation and whether this breakthrough can pave the way for deeper structural reforms and improved transparency in the bilateral trade relationship.

The information presented is general in nature, and is not intended to constitute legal advice with respect to any event or occurrence, and may not be considered as such.​​ Information has been obtained from sources believed to be reliable. However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.​ Due to the complexity of Customs Regulations, valuations are based on information currently available and should not be considered binding, we recommend obtaining National Customs Rulings in areas of uncertainty.​

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