China-US tariff war easing: the turning point from high-intensity confrontation to "trading partners"

On May 12, 2025, China and the United States ended their two-day economic and trade talks in Geneva, issued a joint statement announcing a significant reduction in the previously increased tariffs, marking an unexpected turning point in the tariff war that has lasted for many years. For the first time, the US has called China a "trading partner" and promised to modify its tariff policy on Chinese goods. Does this achievement mean that the Sino-US tariff war will end? This article will combine the latest tariff adjustment data to deeply analyze the true significance of this incident from four aspects: negotiation background, impact of results, potential risks and future prospects, and take you to see the opportunities and challenges of easing the customs tariff war.

Tariff war background: from high-intensity confrontation to negotiating

table

Since the Trump administration provoked a tariff war, Sino-US trade relations have experienced ups and downs. In April 2025, the Trump administration issued consecutive executive orders, imposing tariffs of up to 125% on Chinese goods. China quickly countered, and the tariff rate also increased to 125%. The following is a comparison table of specific tariff adjustments:

Comparative table of tariff adjustments between China and the United States (April 2 to May 12, 2025)

time| US tariff measures against China| China's tariff measures against the United States
---|---|---
April 2| Executive Order No. 14257: Increased 34% tariff| Taxation Committee Announcement No. 4 of 2025: 34% is imposed on US goods (the comprehensive tax rate for some goods such as soybeans reaches 49%)
April 8| Executive Order No. 14259: An additional 50% tariff is imposed, with a cumulative tax rate of 104%| Taxation Committee Announcement No. 5 of 2025: The tax rate increased from 34% to 84%
April 9| Executive Order No. 14266: Additional tariffs of 21% will be added, with a cumulative tax rate of 125%| Taxation Committee Announcement No. 6 of 2025: The tax rate is increased to 125%
May 12 | 1. Suspend the 24% tariff (90 days) 2. Retain the 10% tariff 3. Cancel the additional levy on April 8 and 9 | 1. Simultaneously suspend 24% tariff (90 days) 2. Retain 10% tariff 3. Cancel the additional taxation part of April announcement No. 5 and 6

The high tariff war has led to tight global supply chains, intensified U.S. inflation, rising consumer prices, and Chinese exporters are facing a decline in orders. Differences arise within the US, with Treasury Secretary Scott Bessent proposing negotiations to ease the situation, while hardliners such as Commerce Secretary Howard Lutnick tend to maintain high-pressure policies. China has accelerated diversified trade, deepened cooperation with Brazil, ASEAN and other countries, and reduced its dependence on the United States. On May 6, the two sides announced a meeting in Geneva. The Chinese representative is Vice Premier He Lifeng of the State Council, and the US is Becent and Trade Representative Jamison Greer.

Negotiation results: Cooling of tariff war and new signals of "trading

partners"

The joint statement on May 12 pressed the "pause button" for the tariff war. According to the statement, the two sides will amend their tariff policies before May 14: the United States suspends 24% additional tariffs, retains 10% benchmark tariffs, and cancels the additional tariffs on April 8 and 9; China simultaneously suspends 24% tariffs, retains 10% tariffs, and cancels the additional tariffs in Announcements No. 5 and 6. The two sides also agreed to establish an economic and trade consultation mechanism to continue to discuss trade issues.

This result exceeded market expectations. After the announcement, Hong Kong's Hang Seng Index rose 2.98%, US stock futures soared, and the stock prices of US companies such as Nvidia and Tesla rose, reflecting the market's optimism about the easing of the tariff war. For Chinese consumers, the cooling of the tariff war means that the prices of US mobile phones, cars and other commodities are expected to fall, and exporters will also restore trade stability.

The change in the US attitude is particularly eye-catching. Greer called China a "trading partner" and said the agreement would bring "positive change" to the United States. Besent stressed the "substantial progress" of the negotiations, which Trump also called on the Truth Social platform "major progress." The change in wording from "opponent" to "trading partners" is seen as a signal of the US's adjustment of its tariff war strategy. However, the 90-day "observation period" stipulates that the additional tariff of 24% is only a suspension, and if subsequent negotiations break down, the tariff war may rekindle.

The impact of the easing of tariff war: opportunities and hidden worries

coexist

China: Export recovery and strategic initiative

For China, the easing of the tariff war is a tactical victory. The reduction of tariffs to 10% restores trade stability, alleviates pressure on exporters, and promotes the consumption of US goods in the domestic market. China adheres to its core interests during the negotiations and has not lifted the rare earth export control, which poses a challenge to the supply chain of US military-industrial enterprises and highlights China's initiative in the global industrial chain.

However, the long-term impact of the tariff war remains. For example, US soybeans interrupted exports due to tariff wars, Brazil seized the Chinese market and occupied more than 20 million tons of trade share. Even if the tariff war is over, American agriculture may find it difficult to regain the market. The 90-day observation period also adds uncertainty to subsequent negotiations, and companies need to be vigilant about the repetition of US policies.

1. United States: Short-term boost and long-term difficulties

For the US, the easing of the tariff war has boosted market confidence in the short term and alleviated inflationary pressure. However, the Trump administration’s core goal—closing the trade deficit—has not been achieved. Economists pointed out that the tariff war failed to change the structural disadvantage of US trade with China, but instead pushed up domestic prices. The impact of rare earth controls on US military-industrial enterprises continues to ferment, highlighting the fragility of their supply chains.

Differences within the White House cast a shadow on the subsequent direction of the tariff war. Moderates represented by Becente dominate, but hardliners may push policy repetition. Trump's "change orders every day" style adds uncertainty.

2. Global Impact: Chain Reactions to Easing Tariff Wars

The easing of the tariff war injects confidence into the global economy. The UK has previously reached a 10% tariff agreement with the United States, and the Sino-US talks have further stabilized multilateral trade expectations. However, scholars warn that the systemic competition between China and the United States is difficult to resolve, and the United States may turn to non-tariff means such as technological blockade to put pressure on China.

The deep meaning of tariff war: easing rather than ending

The success of this talks stems from the dual role of China's strategic resilience and the pressure on the US economy. China has forced the US to reassess the cost of the tariff war through diversified trade and rare earth control. The risks of domestic inflation and international isolation prompted the Trump administration to choose to compromise.

However, it is too early to say that the tariff war is over. The 90-day observation period means the fragility of the agreement, and Trump's repeated policies may rekindle the war at any time. The term "trading partner" is more a signal sent by the US to the market and allies, rather than a fundamental change in its strategy toward China. The essence of the tariff war is a contest between global industrial chains and geopolitical dominance, and short-term easing is difficult to conceal long-term competition.

Future Outlook: Carefully respond to the new pattern of tariff war

The Geneva talks on May 12, 2025 set a "rest" for the tariff war and brought respite to Chinese and American companies and the global market. For China, maintaining strategic determination, deepening diversified layout, and improving domestic demand resilience are the key to coping with uncertainty in the tariff war. For the United States, the easing of the tariff war has given it room to adjust its policies, but the trade deficit and supply chain challenges still need to be resolved.

In the future, whether the Sino-US economic and trade consultation mechanism can be transformed into long-term stability depends on the sincerity and wisdom of both sides. The easing of the tariff war is the dawn of chaos, but a true peaceful trade order still requires time and effort.

Conclusion: The easing of the tariff war opens a new window for Sino-US relations, but uncertainty remains. Enterprises and investors need to pay close attention to subsequent negotiation trends, seize opportunities and avoid risks.