Early this morning, the Trump Administration and Chinese state media each issued a Joint Statement announcing an agreement between the United States and China that is expected to provide relief for importers and exporters for at least 90 days, beginning by May 14, 2025.
Both Sides Turn Down the Heat
The United States has committed to take action by May 14, 2025, to reduce the current reciprocal tariffs on articles of China from 125 percent to 10 percent for an initial period of 90 days. The Joint Statement does not address whether this change may have any retroactive effect nor when a decision on retroactivity will be announced, nor whether there will be any applicable carve outs for goods already on the water. As discussed at length below, this change does not impact the 20 percent IEEPA Fentanyl tariffs, Section 301 tariffs, and Section 232 tariffs that remain in place.
An associated Fact Sheet describes the 10 percent tariff as “a fair baseline that encourages domestic production, strengthens our supply chains and ensures that American trade policy supports American workers first.” This, coupled with the similar outcome in last Thursday’s trade deal with the UK, suggest a possibility that the 10 percent “baseline” may remain largely intact going forward, even for differently situated trading partners.
Also by May 14, 2025, China has agreed to reduce its tariffs against U.S. goods to 10 percent and adopt all measures to suspend or remove “non-tariff countermeasures” taken against the United States since April 2, 2025. While the specific non-tariff countermeasures at issue have not yet been listed by either side, these would presumably include items such as export restrictions on rare earth minerals.
Neither the Joint Statement nor the Fact Sheet addresses any change to the elimination of de minimis treatment for articles of China (including Hong Kong and Macau). The associated Fact Sheet expressly states that the 20 percent IEEPA Fentanyl tariffs, as well as tariffs imposed pursuant to Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 (Section 301) will remain in place against China. Insofar as the duty retention is framed as “retain{ing} all duties imposed on China prior to April 2, 2025,” it is unclear whether this deal might have any implications for the Section 301 shipping fees targeting Chinese-owned, Chinese-produced, and/or Chinese-Built vessels that are scheduled to take effect on October 14, 2025.
Next Steps
We expect further clarification on this Statement by May 14, 2025. The results of further negotiations will presumably be clear towards the end of the 90-day initial period, which falls on August 10, 2025. This 90-day reprieve will provide much welcomed relief for importers struggling to manage their supply chains and customer pricing expectations under the higher tariffs imposed last month.
Responding to New Developments
Cassidy Levy Kent’s attorneys, economists, compliance experts, and licensed customs brokers are ready to help companies develop strategic responses to the latest changes in U.S. tariff policy and plan for potential developments. The Cassidy Levy Kent team’s deep familiarity with trade law and policy enables clients to adapt and stay ahead of the curve. As noted above, we anticipate the release of further details concerning the implementation of this deal in the coming days.