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The United States and China have agreed to a 90‑day truce that cuts US tariffs on Chinese imports from 145% to 30% and reduces Chinese retaliatory duties on American goods from 125% to 10%. The move, announced on May 12, 2025, targets critical technology and digital‑economy sectors and signals a pause in the trade war that began in April.

Background

In April 2025 the US sharply increased tariffs on Chinese goods to levels not seen since the early 1990s, prompting China to retaliate with equally steep duties. The escalation effectively priced each side’s exports out of the other’s market, creating a sharp decline in bilateral trade flows. The 90‑day agreement is intended as a confidence‑building measure rather than a permanent settlement, giving both sides room to negotiate longer‑term solutions such as Section 122 and Section 301 tariffs on the US side.

What Happened

On May 12, 2025 the two countries announced a temporary truce that:

  • Reduces US duties on Chinese imports to 30% from 145%.
  • Lowers Chinese retaliatory duties on American goods to 10% from 125%.
  • Targets sectors critical to technology supply chains and the digital economy, including electronics and semiconductors.
  • Includes China’s commitment to suspend certain non‑tariff measures affecting US companies in defense and aerospace.
  • Sets a 90‑day expiration date in mid‑August 2025, after which the tariffs will revert to their previous levels unless extended.

Market & Industry Implications

The tariff rollback is expected to lower input costs for companies importing Chinese goods, particularly in technology hardware. This could reduce prices for consumer electronics and lower the cost of crypto‑mining rigs that rely on semiconductor components. The semiconductor provisions are especially relevant to the crypto and blockchain sector, where mining hardware and AI chips flow through supply chains that touch both countries. A reduction from 145% to 30% duty should stabilize hardware costs that have been volatile since the tariff escalation began. The suspension of non‑tariff measures in defense and aerospace also signals that negotiations are addressing deeper structural issues beyond duty rates.

What to Watch

  • Mid‑August 2025 expiration of the 90‑day truce and any announcements about extension or permanent settlement.
  • Development of US Section 122 and Section 301 tariff mechanisms, which may outlast the temporary window.
  • Any further non‑tariff concessions from China affecting US companies in defense, aerospace, or other strategic sectors.