US and China Agree to 115% Tariff Cut for 90 Days [2025 Update]

Trade tensions between the US and China just took a dramatic turn. Both nations announced a deal to cut most tariffs by 115% for the next 90 days, bringing the steepest rates down to 10% for Chinese imports and 30% for US goods. This short-term truce comes after years of tariff hikes that rattled global markets, strained supply chains, and fueled inflation.

The agreement arrives at a crucial time, as both economies try to limit the fallout from a drawn-out trade war. While not a final settlement, this pause offers relief for businesses facing high costs and uncertainty. Stock markets responded with strong gains, showing just how much was riding on a breakthrough. All eyes are now on how negotiations unfold over the coming months, with hopes pinned on a more stable outlook for international trade.

The Path to a Tariff Truce: Background and Negotiations

The journey toward tariff reductions between the US and China has been nothing short of dramatic. Years of rising duties and heated rhetoric shaped the trade relationship, with ripple effects for businesses and households everywhere. The latest breakthrough didn't happen overnight—it was the result of a complex web of disputes and behind-the-scenes bargaining. To understand the significance of this agreement, it's important to see how the stage was set and how negotiators shifted from confrontation to compromise.

Background on the US-China Trade War

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The US and China have a long, complicated trade history, but open conflict erupted in 2018 when the US imposed sweeping tariffs on Chinese goods. These measures, aimed at narrowing the US trade deficit and countering what officials described as unfair practices, triggered immediate retaliation from China. The result: each nation raised import taxes on hundreds of billions of dollars in goods.

Over the next several years, tariffs climbed sharply. Price hikes ricocheted through supply chains, impacting everything from electronics to farming. For many, the economic consequences felt immediate—higher costs, stunted exports, and widespread uncertainty. Efforts at dialogue produced a partial deal in early 2020, known as the "Phase One" agreement, but deep disputes over technology, intellectual property, and government subsidies remained.

The conflict continued to drag on, fueling inflation and threatening global growth. Tensions cooled in 2024, thanks to fresh efforts at diplomacy and increased pressure from both economies to find common ground. For more background on this era, you can explore the detailed timeline of the China–United States trade war and an overview of the contentious US-China trade relationship.

From Tensions to Talks: 2024 Negotiation Highlights

This year brought a new sense of urgency to trade talks. With inflation still lingering and businesses absorbing record tariffs, both sides recognized change was needed. Behind closed doors, delegations met for weeks, working through major sticking points: How much would each side drop tariffs? On what goods? For how long?

Negotiators faced resistance from domestic industries, political leaders, and even skeptics abroad. But momentum grew as both governments committed to short-term relief. Trade envoys hammered out the plan to slash tariffs by 115%, setting a three-month window to iron out a more comprehensive pact.

Key moments in the negotiations included:

• High-level meetings in Geneva, featuring senior trade officials and economic advisers from both countries.
• Intense debate over the exact percentage cut and which tariffs to prioritize.
• Parallel agreements for increased transparency and regular consultation throughout the 90-day period.

According to reports, the final framework drew on lessons from previous deals and reflected the shared desire to stabilize markets. The announcement triggered immediate global market gains and cautious optimism among affected industries.

For a deeper look at how these intense negotiations unfolded, see the coverage from Reuters on the 2024 talks and the detailed market reactions as the agreement was revealed.

Details of the 115% Tariff Reduction Deal

After years of rising import taxes, this new deal rewrites the script between two major economic powers. The agreement to slash tariffs by 115% stands out for its scale and speed. It doesn't erase all the barriers overnight, but for businesses and consumers on both sides, it marks significant short-term relief.

Tariffs Involved: What’s Changing and What’s Not

Recent trade talks led to a clear change in rates for many categories, though not every product is affected equally. Here’s what stands out from the deal:

• US tariffs on Chinese goods will drop from an average of 145% down to 30%. This covers a wide range of products — everything from electronics to footwear.
• China will reduce its duties on US goods from about 125% to 10%. That puts American exports, like agricultural products and industrial equipment, at a big advantage compared to just a week ago.

Not every tariff will vanish, though. Strategic sectors such as technology and sensitive military-related supplies are mostly exempt from this reduction. High-controversy goods, including some semiconductors and advanced manufacturing equipment, will keep existing duty structures as both sides review security policies.

Here’s a quick look at the categories involved:

• Included in reduction:
  • Consumer electronics
  • Apparel and footwear
  • Automobiles and auto parts
  • Agricultural products
  • Medical supplies
• Not included:
  • Military and defense-related items
  • Certain high-tech components
  • Some pharmaceuticals and biotech

For more granular details, you can find the official breakdowns in the BBC report on the tariff reduction agreement and this summary by Bloomberg.

The 90-Day Window: A Temporary Pause

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This agreement is not a permanent fix — yet. Instead, both sides have agreed to this sharp rollback for 90 days. During this time:

• Companies will pay much less at the border, dramatically lowering supply chain costs for both US and Chinese goods.
• Customs authorities are set to enforce the new rates as early as May 14, with the temporary cuts set to expire unless another deal is reached.
• The 90-day span acts as a “cooling-off” period for negotiations. It signals intent to keep talking, but anything beyond this window is still on the table.

What happens if the two countries don’t settle on a longer-term arrangement? The old tariffs could snap back into place, making this window both a lifeline and a countdown.

Full updates and day-to-day trade impacts are being tracked in sources like CNN’s trade deal announcement coverage and the Reuters live update on US-China tariff levels.

For now, businesses and markets are watching closely — weighing every move and ready to adapt as this fast-moving story continues to unfold.