Shipper Alert: Reciprocal Tariffs Between China & US Drop to 10% – 90 Days to Negotiate
SHIPPER ALERT: The Trump Administration is dropping tariffs on Chinese goods by more than 100% for 90 days of negotiation.
In fact, reciprocal tariffs between the U.S. and China are dropping to 10% from both countries.
However, the base U.S. tariffs on Chinese goods is more like 30% as the 20% fentanyl-related tariff the Trump Administration placed on Chinese goods remains in place. Additionally, various other individual tariffs will stay in place too.
China is supposed to remove some non-tariff restrictions/trade barriers on U.S. goods along with dropping its retaliatory or reciprocal-related tariffs on U.S. goods to 10%.
Wow, that deescalated quickly. Sort of.
The Chinese government, under President Xi Jinping, is still posturing with the same kind of language to its people about how it will not bow to the U.S. or back down. Despite that, it does appear for at least the next three months, generally speaking, China’s tariffs on the U.S. will be 10% while the U.S. tariffs on China will be 30%.
This news is the result of negotiations that happened over the weekend in Switzerland.
I mentioned in a Shipper Alert on Friday about a trade deal with the UK that “Treasury Secretary Scott Bessent is meeting in Geneva this weekend with representatives from China to discuss a path forward in the midst of this tariff-escalating trade war between the countries.” I doubt many expected those negotiations to result in this tariff slashing, alluded to Sunday. Happy Mother’s Day! Especially if your mother is a shipper.
The details were announced in a presser last night.
Ultimately, this boils down to the U.S. treating China, now that it has come to the negotiation table, like other countries. When the Trump Administration announced reciprocal tariffs, other countries reached out to negotiate rather than retaliate, so the administration paused reciprocal tariffs for 90 days, reducing them all to a 10% baseline. Except on goods from China. That’s because China initially chose to retaliate with tariff hikes of its own, causing the Trump Administration to hike tariffs even higher on Chinese goods. Bessent called the result of those soaring tariffs basically an embargo.
Apparently, neither side is looking for a decoupling of trade between the U.S. and China. Now, we’ll have to see if a satisfactory trade deal can be reached in the next 90 days between the countries.
There may be a surge in importing from China during this window. The slashed tariffs paired with current low freight rates should be attractive for importers. However, such an increase in demand would likely mean freight rates will increase. And look at the timing. Tariffs slashed for mid-May through mid-August (and maybe beyond with a trade deal)… just in time for the international shipping peak season.
