U.S. and China Reach Trade Deal to Lower Tariffs

The United States and China agreed to a trade deal last week that will lower tariffs on Chinese goods from 30 percent to the 10 percent baseline imposed on other countries.

The deal followed a bilateral meeting between President Donald Trump and Chinese President Xi Jinping in South Korea. As part of the deal, both sides made concessions intended to ease trade tensions. China will halt the flow of precursors used to make fentanyl into the United States, addressing one of the major justifications the Trump administration has used to impose tariffs on foreign goods. Additionally, China will eliminate its current and proposed export controls on rare earth minerals and other critical materials; end retaliation against U.S. semiconductor manufacturers and other American companies; and purchase at least 12 million metric tons of U.S. soybeans during the last two months of 2025 and 25 million metric tons each of the next three years.

In addition to lowering the tariff rate to 10 percent, the United States will suspend shipping fees and extend tariff exclusions related to Section 301 goods for one year.

The deal signals progress between the two countries, which have been entangled in trade and tariff one-upmanship for most of the year. In April, the Trump administration set a 145 percent tariff on Chinese goods, and Beijing retaliated with a 125 percent tariff of its own. They later agreed to open negotiations on a long-term trade agreement, with the United States lowering tariffs on Chinese goods to 30 percent and China reducing its U.S. tariffs to 10 percent while those talks were ongoing.