China-U.S. Trade: A Rollercoaster Ride
By Norbert Hellmann
Celebration of the Freedom Day Anniversary
China and the U.S. have hit the brakes on their trade war for now. But don't celebrate just yet – skepticism remains the name of the game.
The latest round of trade talks between the two economic juggernauts during Donald Trump's second term has brought some progress. Gone are the days of absurd tit-for-tat tariff battles reminiscent of Trump's so-called "Liberation Day" in early April, with mutual tariffs exceeding 100%. Instead, we're dealing with more reasonable U.S. additional tariffs of 30% and Chinese surcharges of 10%.
However, beneath the surface, things aren't as rosy as they seem. When combined with existing tariff rates in various product categories, these new rates still represent formidable trade barriers.
Let's delve a bit deeper...
In May 2025, representatives from the U.S. and China agreed to a truce in Geneva, slashing tariffs significantly for a 90-day period. The U.S. cut its tariffs on Chinese goods from a staggering 145% to 30%, while China reduced its tariffs on U.S. goods from 125% to 10%. This detente caused quite the stir in global markets, but experts warn this tariff reduction is merely a temporary "offramp." Some say Washington has conceded ground to Beijing in the ongoing trade talks[1].
The broader trade conflict, however, remains a tangled web. The tariff situation can be described as a "two-step" process with unexpected twists and turns, reflecting the ongoing uncertainty and the potential for sudden reversals. Moreover, Trump's reciprocal tariffs implemented in April 2025 extended exemptions to key sectors such as pharmaceuticals and electronics, but sector-specific measures and tariffs are still on the horizon[2].
The high tariffs, though partially suspended temporarily, have already caused significant turbulence in trade flows, supply chains, and macroeconomic outputs. The temporary tariff reductions have yet to resolve the underlying trade tensions, and both nations remain wary about the stability and longevity of the current truce[1][2].
In a nutshell, after the temporary tariff rollbacks, the US-China trade conflict is still a rollercoaster ride, featuring a significant but time-limited decrease in tariffs, ongoing negotiation efforts, and persistent uncertainty about future trade relations and tariff policies. The conflict has not ended but entered a phase of cautious de-escalation with the potential for renewed tension after the 90-day period concludes.
[1] "Trade Policy and the U.S.-China Relationship: What Lies Ahead?" Forum on International Trade and Security, CFR.org.[2] "U.S.-China Trade: What's Next After the 90-Day Truce?" Brookings.edu.
- The temporary tariff reductions in the US-China trade conflict have caused significant turbulence in trade flows, supply chains, and macroeconomic outputs, but experts warn that this decrease is merely a temporary "offramp" in the ongoing business and political saga.
- The broader trade conflict between the two countries, despite the temporary truce, remains a tangled web of uncertainty and the potential for sudden reversals, with sector-specific measures and tariffs still on the horizon in the world of general news.
- Washington and Beijing are both wary about the stability and longevity of the current truce in their trade war, as the reduction in tariffs represents only a significant but time-limited decrease, and the conflict has not ended but entered a phase of cautious de-escalation in the finance and industry sectors.
