China and the U.S. have agreed to a 90-day tariff truce, set to begin on May 14, 2025. The deal appears to meet nearly all of Beijing’s demands, with the U.S. slashing tariffs on Chinese imports from a steep 145% down to 30%.
In exchange, China will cut its tariffs on American goods from 125% to just 10%. Both countries also agreed to suspend or remove a series of retaliatory measures and non-tariff barriers imposed since April—this includes China’s export bans on critical minerals and the U.S.'s executive orders targeting Chinese imports.
While some pre-existing tariffs remain—such as those from Trump’s first term and sector-specific duties on autos and steel—this agreement marks the most significant tariff rollback since the latest round of trade tensions flared up in April.
The truce also introduces a mechanism for ongoing negotiations, with both countries pledging to maintain open dialogue and work toward a more stable, long-term trade relationship.
“Given the distinct national contexts, political disagreements are to be expected. What matters most is that such differences are managed with mutual respect for each other's core interests and through sustained dialogue.”
A Tactical Battle of Wills
Chinese state media has praised the deal as a win for Beijing, crediting its tough stance for the outcome.
#China state TV social media account says the outcome of trade talks with @realDonaldTrump team shows “China's firm countermeasures and resolute stance have been highly effective.” (China gets nearly all #tariffs off for doing very little other than agreeing to talk— a… pic.twitter.com/U9BMPZOAEp
— Eunice Yoon (@onlyyoontv) May 12, 2025
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#China state TV social media account says the outcome of trade talks with @realDonaldTrump team shows “China's firm countermeasures and resolute stance have been highly effective.” (China gets nearly all #tariffs off for doing very little other than agreeing to talk— a… pic.twitter.com/U9BMPZOAEp
— Eunice Yoon (@onlyyoontv) May 12, 2025
The tariff wars have been brewing for over a month. Tensions escalated when President Donald Trump imposed sweeping tariffs, with rates as high as 34% on Chinese goods. Instead of backing down, China retaliated with tit-for-tat tariffs against the U.S.
President Xi Jinping refused to speak directly with Trump, despite the latter’s repeated attempts to initiate dialogue. Beijing also took internal steps to protect its economy—cutting key interest rates and rolling out alternative measures to ensure domestic stability.
Despite economic strain, Xi received strong backing at home, with widespread public support urging him not to yield to U.S. pressure.
Trump, meanwhile, faced growing pushback from business groups, financial markets, and members of his own party—many of whom feared electoral backlash ahead of next year’s midterms.
Economic Power Matters
Gerard DiPippo, Associate Director of the RAND China Research Center, told Bloomberg that the key takeaway from the standoff is that “economic power matters.”
“For Beijing, this marks a strategic vindication—one that reinforces President Xi Jinping’s focus on manufacturing and self-reliance, particularly from the standpoint of economic security.”
Amid signs of de-escalation between the two economic giants, Trump said on Monday (May 12) that he may speak with President Xi by the end of the week.
He described the recent negotiations as a “reset” in bilateral relations.
“We’re not looking to hurt China. China was being hurt badly—they were closing factories, experiencing unrest—and they were very happy to be able to do something with us.”