Following the October 30, 2025, meeting between President Donald Trump and President Xi Jinping, the United States and the People’s Republic of China brokered the “Kuala Lumpur Joint Arrangement” on trade and economic relations. Releases from the White House and China’s Ministries of Finance and Commerce establish commitments from both nations to deescalate certain tariff and non-tariff measures. Implementation of some of these commitments has begun.
On the U.S. side, President Trump issued two Executive Orders directing (1) the reduction of the IEEPA fentanyl tariffs beginning on November 10, 2025, and (2) the continuation of the current IEEPA reciprocal tariff rate on goods originating from China. China, in turn, will suspend or reduce certain tariffs on products of the United States.
Tariff and Non-Tariff Commitments from Both Sides
This is not the first time that the United States and China have reached an accord intended to deescalate tit-for-tat economic measures. For example, after the United States raised International Emergency Economic Powers Act (IEEPA) reciprocal tariffs on products of China to a maximum of 125% between April and May of 2025 and China responded in kind, a bilateral meeting in Geneva led to Executive Order 14298, which reduced the U.S. tariffs to 10%, with China reciprocating. Such de-escalation persisted after talks between both parties in Stockholm. However, a stable consensus proved elusive on issues such as the U.S. 50% rule for export controls and China’s administration of export licenses for rare earths.
This dynamic is underscored by the press release of China’s Ministry of Foreign Affairs, which asserts that the United States and China “reached consensus on solving various issues,” but alludes to the need to “work out and finalize the follow-up steps as soon as possible, and ensure that the common understandings are effectively upheld and implemented.” Put differently, this détente may only persist so long as each country is satisfied that the other is following through on commitments promised but not yet implemented.
The White House issued a fact sheet on November 1, 2025, stating its view of the agreed-upon terms. Specifically, it provides that the United States has agreed to take the following measures:
- Beginning November 10, 2025, reduce the IEEPA fentanyl tariffs on products of China from 20% to 10% until November 10, 2026, which has been implemented by Executive Order;
- Beginning November 10, 2025, maintain the current 10% IEEPA reciprocal tariff rate until November 10, 2026, which has been implemented by Executive Order;
- Extend existing exclusions of certain products from the Section 301 tariffs on products of China until November 10, 2026;
- Beginning November 10, 2025, suspend the implementation of certain export controls addressing affiliates of certain listed entities (also referred to as the “50 Percent Ownership Rule”) for one year; and
- Suspend through November 9, 2026, certain actions taken in response to the Section 301 shipbuilding investigation. Per a subsequent request for comments by the U.S. Trade Representative, this suspension would temporarily eliminate the requirement to pay or accrue liability for the various shipping fees on Chinese vessel operators, Chinese vessel owners, operators of Chinese-built vessels, and vessel operators of foreign-built vehicle carriers (Annex I-III). In addition, during the suspension period, no duties will be imposed on ship to shore cranes and other cargo handling equipment (Annex V.A). However, the proposed suspension does not alter the previously announced schedule for increasing the proportion of U.S.-built, U.S.-flagged, and U.S. operated liquefied natural gas vessels (Annex IV). And the U.S. intends to continue negotiating with China and cooperating with South Korea, and Japan to “revitaliz{e} American shipbuilding.”
A statement on the arrangement released by China’s Ministry of Commerce (MOFCOM) on October 30, 2025, is essentially consistent with respect to its characterization of the foregoing measures, notwithstanding differences in framing and verbiage. However, it references additional U.S. “commitments in the fields of investment,” which are not mentioned on the White House fact sheet.
For China’s part, according to the White House, China has agreed to:
- Suspend its global export restraints on rare earths that were announced on October 9, 2025, which would have required a specific export license for each stage of the supply chain;
- Issue general licenses for one year on exports of four rare earth minerals (gallium, germanium, antimony, and graphite) for the benefit of U.S. end users and their suppliers around the world;
- Take “significant measures” to end the flow of fentanyl to the United States, which include stopping shipments of certain designated chemicals to North America and strictly controlling exports of certain other chemicals to all destinations;
- Suspend all retaliatory tariffs on U.S. exports announced since March 4, 2025, including on U.S. exports of chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products;
- Purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025 and also purchase at least 25 MMT of U.S. soybeans in each of 2026, 2027, and 2028;
- Resume purchases of U.S. sorghum, as well as softwood and hardwood logs;
- Suspend its port fees on U.S. built ships imposed in retaliation to the Section 301 shipbuilding investigation and remove shipping entities from sanctions list;
- Extend the expiration of its market-based tariff exclusions process to allow for exclusions to remain valid through December 31, 2026;
- Allow exports of legacy chips; and
- Terminate various antitrust, anti-monopoly, and anti-dumping investigations targeting U.S. companies in the semiconductor supply chain.
With respect to China’s commitments, MOFCOM’s October 30, 2025, statement likewise diverges from the White House fact sheet in certain respects. Here, the vagaries of the PRC statement may be material, although MOFCOM and the PRC customs authority issued certain additional materials on November 5, 2025, which clarify some of the ambiguities.
Specifically, on November 4, 2025 (U.S. time), PRC customs authorities took steps to mirror the U.S. tariff actions. First, whereas the U.S. ordered the one-year suspension of a 24% increase to IEEPA reciprocal tariffs on products of China, but maintained the existing 10% IEEPA reciprocal tariff, the PRC announced a one-year suspension of a 24% increase to tariffs on products of the United States, while retaining the existing 10% tariff.
Second, whereas the U.S. ordered the reduction of IEEPA fentanyl tariffs on products of the PRC from 20% to 10% for a one-year period, the PRC announced a one-year suspension of tariffs originally imposed on March 4, 2025. These product-specific measures had covered U.S. chicken (15%), wheat (15%), corn (15%), cotton (15%), sorghum (10%), soybeans (10%), pork (10%), beef (10%), aquatic products (10%), fruits (10%), vegetables (10%), and dairy products (10%).
Indeed, the U.S. and PRC tariff reduction measures are truly a “mirroring” exercise insofar as the U.S. measures technically take effect at 12:01AM on November 10, 2025, whereas measures by China, which is 13 hours ahead, go into effect at 13:01PM on November 10, 2025.
In addition, MOFCOM has confirmed the particulars of certain export controls measures. The U.S. entities to be suspended or removed from China’s unreliable entities list for one year are those identified in unreliable entity list announcements No. 5, 6, and 7, dated March 4 and April 4, 2025. The U.S. entities to be removed from China’s export control list for one year are those identified in export control announcements No. 13 and 21, dated March 4 and April 4, 2025.
MOFCOM’s October 30, 2025, statement tends to pair U.S. and Chinese commitments, suggesting China’s view of which concessions were traded for others. For example, tariff actions are paired with tariff actions and measures related to shipping are paired with other measures related to shipping. However, the PRC’s “suspen{sion of} the implementation of relevant export control measures announced on October 9,” which appears to reference China’s recent rare earth export controls, is paired with suspension of the BIS “50% rule” for export controls.
Interestingly, notwithstanding the fact that one of the IEEPA tariff regimes is specifically tied to fentanyl, MOFCOM does not link U.S. reduction of those tariffs to the acknowledged (but nonspecific) “consensus on issues such as fentanyl anti-drug cooperation.” Rather, this appears at the end of MOFCOM’s statement, alongside references to “expanding trade in agricultural products,” presumably a reference to purchase commitments. By contrast, the Executive Order lowering IEEPA China fentanyl tariffs specifically ties the reduction to China’s commitment to address certain fentanyl-related shipments. MOFCOM otherwise mentions an additional Chinese commitment that does not appear on the White House fact sheet, viz., to “properly resolve the TikTok-related issues with the US.”
U.S. Implementation Coupled with Continued Monitoring
Generally, the modifications to the IEEPA fentanyl and reciprocal tariffs remain subject to ongoing monitoring of China’s implementation of its commitments under the Arrangement. Separate from the commitments described above, the United States may undertake tariff actions taken under different regimes, such as Section 232 of the Trade Expansion Act of 1962. Presently, USTR is also reviewing China’s commitments in the “Phase 1 deal” reached during the first Trump Administration. The outcome of that process may lead to further remedial actions.
Both Executive Orders maintain an ostensibly broad delegation of IEEPA authority to certain cabinet officials. Should the President find that China has failed to implement its commitments pursuant to the Arrangement, existing measures may be further modified, as seen with past tariff actions.
Responding to New Developments
The attorneys, licensed customs brokers, compliance professionals, economists, and trade specialists of Cassidy Levy Kent regularly assist companies in evaluating their supply chains to ensure compliant market access and adjust for tariff-related developments, both mitigating burdens and taking advantage of opportunities. Cassidy Levy Kent also leverages its thorough understanding of relevant legal regimes to advise governments on tariff policy and procedures.