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Reuters
12-05-2025
- Business
- Reuters
What's in China-US trade deal? Tariff cuts and key details
BEIJING, May 12 (Reuters) - China and the United States announced a truce in their trade war on Monday after talks in Geneva that will roll back the bulk of tariffs and other countermeasures by Wednesday. The United States is dropping the extra tariffs it imposed on China this year to 30% from 145%, while China is cutting them to 10% from 125%. Tariffs imposed before April 2, including those dating back to U.S. President Donald Trump's first term, and other restrictions, such as the U.S. measures to end low-value package tariff exemptions, known as the "de minimis" rule, appear to remain. The United States has agreed to adjust or remove three executive orders, which collectively put 115% tariffs on imports from China. Washington agreed to drop its so-called "Liberation Day" tariffs from 34% to 10% for 90 days, and remove all tariffs imposed during the tit-for-tat escalation that followed. China has matched the de-escalation, removing all but 10% of the tariffs imposed since April 2, leaving the current rate at 10%. However, that leaves China still facing a 30% tariff once duties imposed before April 2 are counted, including the two rounds of fentanyl tariffs imposed in February and March. Chinese products ranging from electric vehicles, steel and aluminium will also still face separate tariffs imposed over the past several years. China also committed to removing non-tariff countermeasures imposed against the United States since April 2, although it remains unclear how some of these measures will be walked back. As part of its retaliation in April, China added rare earths to its controlled export list, opened an anti-dumping probe into chemical firm DuPont's China business and blacklisted some U.S. defense and tech firms. The wording of the agreement suggests those firms will be removed from the list, which barred trade and investment with China and the anti-dumping probe shelved. The statement only said countermeasures imposed after April 2 will be removed, which would therefore not include a dozen companies blacklisted in March, and the anti-dumping investigation into Google announced in February. DuPont did not immediately respond to a request for comment. In the case of rare earths, because China's decision applied to all countries, it is unclear whether it will count as a U.S.-specific countermeasure under the agreement. There is no mention of the U.S. in the original Ministry of Commerce announcement, opens new tab, which required all exporters to seek licenses before shipping seven types of rare earths. Reuters reported last month that U.S. clients were likely to face a long and uncertain wait for licenses given the trade war. China's Ministry of Commerce did not immediately respond to faxed questions about the rare earths restrictions. A Ministry of Foreign Affairs spokesperson referred questions on the subject to the text of the agreement.
Japan Times
09-05-2025
- Business
- Japan Times
China can play hardball at looming trade talks with U.S., analysts say
A formidable set of cards that includes granting access to its vast market and an ability to withstand economic pain will allow Beijing to play hardball in upcoming trade talks with the United States in Geneva, analysts say. Trade between the world's two largest economies has nearly skidded to a halt since U.S. President Donald Trump slapped China with various rounds of levies that began as retaliation for Beijing's alleged role in a devastating fentanyl crisis. With additional measures justified by Trump as efforts to rebalance the trade relationship and prevent the United States from being "ripped off," tariffs on many Chinese products now reach as high as 145% — with cumulative duties on some goods soaring to a staggering 245%. Stay updated on the trade wars. Quality journalism is more crucial than ever. Help us get the story right. For a limited time, we're offering a discounted subscription plan. Unlimited access US$30 US$18 /mo FOREVER subscribe NOW Beijing has responded with 125% tariffs on U.S. imports, along with other measures targeting American firms. But after weeks of tit-for-tat escalation that sent global markets into a tailspin, the two powers will meet this weekend for a chance to break the ice. Washington has said it's not expecting a "big trade deal" that could address Trump's longstanding complaint about the major goods imbalance with the export powerhouse — but it is hoping the two sides can at least begin to de-escalate tensions. Beijing has vowed to stick to its guns and insisted its demand that all U.S. tariffs be lifted remains "unchanged." Analysts say, however, China is in no major rush to make a deal. "Beijing can impose some pain on the United States," said Chong Ja Ian, associate professor of political science at National University of Singapore. China's core strengths going into the talks are its huge domestic market, as well as "key technologies and control of a significant proportion of processed rare earth minerals." Chong said. 'No wild bluster' Compared to its approach during Trump's first term, Beijing's response to his tariffs this time has been "more mature," said Dylan Loh, an assistant professor at Singapore's Nanyang Technological University. "There's no wild bluster," he explained. "I think they have learnt from their earlier responses and they know that they cannot be led by the nose," he said. U.S. President Donald Trump and U.S. Treasury Secretary Scott Bessent (right) during a meeting at the White House in Washington in April | bloomberg Analysts say China has been able to take more of a hard-line posture to Trump's tariffs this time, despite its struggling economy. "It still has meaningful retaliatory tools and — just as important — staying power," said Lizzi Lee from the Asia Society Policy Institute's Center for China Analysis. China's autocratic system, she said, allowed it "to absorb economic pain in ways democracies often cannot." Beijing has also concurrently launched a charm offensive aimed at tightening trade ties in Southeast Asia and Europe — positioning itself as a more stable and reliable partner in contrast to the mercurial Trump administration. That move allowed Beijing to "build buffers" against trade war vicissitudes, Lee said. "It won't replace the U.S. market overnight, but every incremental diversification reduces exposure and increases negotiating room," she added. That's not to say China isn't hurting. Sales of Chinese goods to the U.S. last year totaled more than $500 billion — 16.4% of the country's exports, according to Beijing's customs data. But as the effects of the trade war sunk in, China's factory activity shrank in April, with Beijing blaming a "sharp shift" in the global economy. While not as colossal as China's export levels, U.S. shipments to the country last year were a considerable $143.5 billion, according to the U.S. Trade Representative website. "Even in the case that one of the two countries would clearly have 'the upper hand', it is still worse off economically than before the trade war started," said Teeuwe Mevissen, senior China economist at Rabobank. Beijing and Washington have "found out that it is not so easy to fully decouple." Talks about talks Policymakers this week unveiled measures to boost domestic consumption — a sign that leaders are "not panicking but feeling some pressure," said Shehzad Qazi, managing director of China Beige Book. Beijing will need to strap in for potentially long and drawn-out negotiations with Washington that could bring "much more volatility along the way," said Qazi. Analysts broadly agree that upcoming talks are a first step toward a de-escalation of tensions that could, a long way down the line, lead to a lifting of tariffs. "A best-case scenario would be agreement around a process to enter future negotiations," said Ryan Hass, senior fellow at Brookings Institution. Beijing could insist on receiving the same 90-day waiver on tariffs that other countries had received, he suggested. And China's insistence that the Switzerland talks came at the request of Washington suggests it is the United States that is desperate for a deal, said Dan Wang, China Director at the Eurasia Group. "The fact that it is happening is showing some concessions already on the U.S. side."
