U.S. and China Agree to Temporary Tariff Reductions, What it means for you?

On May 11, 2025, the U.S. announced that it had reached an agreement with China to mutually reduce tariffs against each country for 90 days. The reduced rates, discussed below, will take effect for goods entered on or after May 14, 2025. The reduced rates will not be retroactive and will only apply to entries effective May 14, 2025, and forward.

According to the May 12, 2025 Executive Order, for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 14, 2025, the agreement consists of the following:

• The U.S will reduce the additional ad valorem rate for all imports from China (including Hong Kong and Macau) from 125% to 34%, as previously set forth in Executive Order 14257 (April 11, 2025).

• The U.S. will further suspend 24% of that 34% rate for 90 days, thereby retaining a 10% duty rate on imports from China for entries made on or after May 14, 2025 until August 11, 2025. Effective August 12, 2025, this 10% duty rate will revert to 34% unless the administration indicates otherwise.

• In turn, China will reduce its tariffs on U.S. imports from 125% to 10%.

• China will also “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.”

According to the statement from the White House, all additional tariffs imposed prior to April 2 will remain in place. Therefore, the U.S.’s current total tariffs on imports from China will consist of:

• The reduced 10% tariff discussed above, which was originally imposed as a baseline “reciprocal” tariff against all countries under the authority of the International Economic Emergency Powers Act (“IEEPA”);

• The 20% tariff effective March 3, 2025, which was also imposed under IEEPA and related to fentanyl;

• Other applicable tariffs, including under Section 301 of the U.S. Trade Act of 1974 (“Section 301”) and Section 232 of the Trade Expansion Act of 1962, as amended (“Section 232”).

The following modifications to Harmonized Tariff Schedule of the United States (“HTSUS”) shall be made for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 14, 2025:

• Heading 9903.01.25 will be amended by deleting the article description and by inserting: “Articles the product of any country, except for products described in headings 9903.01.26–9903.01.33, and except as provided for in heading 9903.01.34, as provided for in subdivision (v) of U.S. note 2 to this subchapter . . . . . . ” in lieu thereof;

• Heading 9903.01.63 will be amended by deleting “125%” each place that it appears and by inserting “34%” in lieu thereof;

• Subdivision (v)(xiii)(10) of U.S. note 2 to subchapter III of HTS chapter 99 will be amended by deleting “125%” and by inserting “34%” in lieu thereof; and

• Heading 9903.01.63 and subdivision (v)(xiii)(10) of U.S. note 2 to subchapter III of HTS chapter 99 are suspended for a period of 90 days (through August 12, 2025) beginning at 12:01 a.m. eastern daylight time on May 14, 2025.

The agreement includes a 90-day moratorium on any further tariff measures. Further, according to the White House, the U.S. and China “will establish a mechanism to continue discussions about economic and trade relations.”

The Husch Blackwell Trade team continues to monitor developments and will provide additional updates as they arise.