The United States and China have announced a mutual reduction in tariffs, marking a significant step back from the escalating trade tensions between the two countries. On May 12, 2025, both nations agreed to lower tariff rates on each other’s goods by 115%, as stated in a joint announcement by the White House and the People’s Republic of China.
This decision comes after high tariff rates were imposed at the beginning of April. President Trump issued an Executive Order titled “Modifying Reciprocal Tariff Rates to Reflect Discussions with the People’s Republic of China,” directing U.S. agencies to implement reduced tariffs on Chinese goods. The joint statement emphasizes “the importance of the critical bilateral economic and trade relationship between both countries and the global economy.”
Treasury Secretary Scott Bessent commented that the United States does “not want a generalized decoupling from China.” While this agreement involves temporary concessions, it is not considered a comprehensive resolution to ongoing trade issues.
Effective May 14, 2025, Chinese goods will be subject to a total of 30% tariffs under the International Emergency Economic Powers Act (IEEPA) for an initial period of 90 days. These tariffs are additional to other applicable duties such as those under Section 232 or Section 301.
The agreement also includes a provision for so-called “reciprocal” tariffs where all articles imported into the United States from China will face an additional ad valorem tariff of 10%. This rate is part of adjustments made following previous executive orders that had set higher rates.
Additionally, existing IEEPA-related tariffs related to fentanyl remain in place, bringing total IEEPA-related duties on Chinese goods to approximately 30%. Other sector-specific tariffs range from 7.5% to up to 100%.
For low-value imports previously eligible for duty-free treatment under de minimis rules, new adjustments reduce these tariffs from 120% to 54%. However, specific duties still apply at $100 per postal item for shipments via international postal networks.
On China’s side, they have suspended their prior tariff increase on U.S. goods for matching periods while maintaining parallel duties during this pause. They also committed to removing non-tariff barriers against U.S. products introduced since early April.
Both parties have agreed to establish a consultation mechanism aimed at continuing discussions about economic and trade relations.
These developments underscore ongoing changes in global trade policy involving two major economies with an estimated $582 billion worth of annual goods traded between them.
Gibson Dunn lawyers prepared this update: Hui Fang, Adam M. Smith, Donald Harrison, and Samantha Sewall are available for further assistance regarding these issues through Gibson Dunn’s International Trade Advisory & Enforcement practice group.
