President Donald Trump has announced a “total reset” in trade relations between the United States and China after a weekend of high-level negotiations in Switzerland.
The agreement marks a meaningful step toward de-escalating the long-running trade tensions between the two global economic powers.
Under the new deal, both nations will suspend a significant portion of their respective tariffs for a 90-day period. The U.S. will reduce tariffs on Chinese goods from 145% to 30%, while China will lower its retaliatory tariffs on American imports from 125% to 10%.
Although no specific start date has been confirmed, many of President Trump’s previous tariff adjustments have been implemented with immediate effect.
As part of the agreement, the U.S. will reduce its so-called “Liberation Day” tariff to 10% for the 90-day window rather than permanently withdrawn. A separate 20% tariff linked to efforts to curb illegal fentanyl trade will remain in place.
However, pre-existing duties on targeted sectors like steel and automobiles will stay in force.
China has committed to suspending or removing all non-tariff barriers and will match the U.S. with a 10% suspended rate on related tariffs.
President Trump cautioned that the suspended tariffs could be reinstated if further progress isn’t made within three months. “We’re not looking to hurt China,” he said. “But China is being hurt very badly.”
In the short term, a surge in transpacific shipping volume is expected, potentially driving up freight rates, especially as rate increases were already planned for May.
Killick Martin will continue monitoring the situation closely. For further updates or assistance, please don’t hesitate to get in touch.
