China and the United States released a joint statement Monday following their high-level economic and trade meeting in Geneva, committing to a 90-day suspension of newly imposed tariffs and the establishment of a bilateral mechanism for continued negotiations.
The Geneva joint statement signals a temporary partial de-escalation in the latest round of U.S.-China trade tensions, but it does not affect the broader architecture of tariffs already in place prior to April 2025.
“While any agreement that reduces tariffs is good news, it is important to note that even with this China agreement, tariffs are much higher overall than they were at the beginning of the year, and many businesses, especially small businesses, are dealing with growing costs and disruptions," said John Murphy, Senior Vice President at the U.S. Chamber of Commerce.
“The US blinked first,” Alicia García Herrero, chief Asia-Pacific economist at French investment bank Natixis told The Financial Times. “It thought it could raise tariffs almost infinitely without being hurt, but that hasn’t been proven right.”
1. Suspension Only Applies to Recent Tariffs:
The joint action suspends or removes specific duties enacted via:
Earlier tariff actions, including those from the original 2018–2020 trade war or Biden-era duties, remain unchanged unless addressed separately.
2. Baseline Tariffs Remain:
Both sides retain a 10% ad valorem tariff on the affected goods. This is not a full rollback but a partial reduction in escalation—akin to a tactical pause, not a strategic reversal.
3. No Effect on Other Schemes:
• Section 301 tariffs imposed by the U.S. under prior administrations still apply unless explicitly revised.
• China’s existing retaliatory tariffs and quotas on goods not covered by the 2025 actions remain in place.
• Sector-specific tariffs, such as U.S. duties on steel, aluminum (Section 232), and solar panels, are unaffected.
[Update: Late Monday afternoon, the White House released an announcement reducing the tariffs on low-value imports known as de minimis]
Tariffs on packages valued less than $800 will now be 54%, down from 120%. The alternative flat fee of $100 per parcel remains unchanged, and a planned increase to $200 has been canceled. Despite this relief, the de minimis exemption continues to impact e-commerce platforms like Amazon, Shein and Temu, which had relied on the exemption for cost advantages
4. Scope Unclear Without Annex:
The statement lacks a product annex. The coverage of goods affected by the suspended tariffs is not fully defined in the public text. This limits clarity on which sectors or commodities benefit.
Sources are telling Reuters that licensing for rare earth export to the US have resumed, which allays a vital supply kink the spat had introduced.
5. Temporary Nature Creates Uncertainty:
The 90-day suspension window implies that failure to reach further progress could see tariffs reinstated, especially given the lack of detailed benchmarks or enforcement provisions.
In sum, this agreement represents a modest tactical de-escalation within the broader and still-active matrix of tariffs. It may ease pressure on select exports/imports in the short term but does not reverse core trade protection measures in either country.
[White House Update]
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