The first round of the trade war initiated by the US president against China has ended with a preliminary agreement
Last week, China and the US agreed on a preliminary deal to reduce trade tariffs, effective from May 14 and lasting for 90 days or until a new agreement is reached. During this period, «reciprocal» tariffs between the two countries will be reduced to 10%. As a result, China will impose a 10% tariff on US imports, while the US will levy a 30% tariff on Chinese goods due to the continued 20% «fentanyl» tariff.
However, this does not include tariffs imposed on certain categories of goods during Donald Trump’s first term. According to clarifications from the US side, the average rate for Chinese exporters will be around 50%. This appears to be a combination of the 20% tariffs imposed during Trump’s first term and the new 30% tariffs. In certain sectors, such as steel and aluminum, the rates will exceed 50%.
For many companies, such tariff levels are unacceptable. So the agreement can be seen as a temporary truce, a stepping stone to real trade negotiations. However, the direction in which the situation will develop remains unclear. It is worth recalling that in May 2020, after the first round of the trade war during Trump’s first term, a similar agreement was canceled, leading to the next phase of confrontation. Today, China is not the same as it was five years ago, and talking to it in the language of ultimatums is much riskier.
The US president quickly declared a «complete reset of relations with China», clarifying that the deal did not include tariffs on cars, steel, aluminum, «and the like», as well as on pharmaceuticals because «we want to bring the pharmaceutical business back to the United States». Trump’s reaction is understandable: he needs at least some tangible success for his policy.
According to sources, the starting point for the negotiations in Geneva were secret contacts between the Chinese delegation and senior US officials during the annual IMF and World Bank meetings in Washington in late April.Both sides were driven to the table by rising business costs in both countries, among other factors. Neither side wanted to budge, and the neutral venue of Switzerland underscored this.
Even after the deal was signed, Chinese Vice Premier He Lifeng, who led the Chinese delegation, said China was willing to work with the US to resolve disputes, expand cooperation, and «make the pie of cooperation bigger». However, he warned that Beijing «will not be afraid» and «will fight to the end» if the US insists on a trade war. So this is not yet peace, but rather a truce.
The temporary nature of the agreement is clearly stated in the joint statement published on the White House website: «Following the implementation of the above measures (i.e. the suspension of reciprocal tariffs), the parties will establish a mechanism to continue discussions on economic and trade relations».
The statement issued by the Chinese delegation and published by Xinhua praised the US negotiators for showing «professionalism, diligence, respect and consideration for the concerns of the other side». This acknowledges the fact that the Americans agreed to China’s requests not to escalate to a complete rupture, but to try to find a negotiated solution.
However, it was not only China’s pleas that prompted Washington to move from tariff hikes to negotiations. Trump’s advisors understand that the WTO is no longer a significant factor and that Beijing’s appeals there are unlikely to be effective. However, internal US legal pressure is mounting. As Politico reports, a case is underway in the US Court of International Trade, where groups of American companies are challenging Trump’s tariffs as unconstitutional. The plaintiffs are seeking to suspend and ultimately overturn the tariffs, arguing that Trump’s declaration of a «trade emergency» and subsequent tariff hikes were unlawful executive overreach that usurped congressional authority.
This legal pressure appears to be pushing the administration to rush into deals not only with China, but with other countries as well. Trump’s trade war, which began just a month and a half ago, could unexpectedly backfire in a matter of weeks — and not at the initiative of the man who started it.
Moreover, according to the Washington Post, White House Chief of Staff Susie Wiles, Treasury Secretary Scott Bessent, and other advisers convinced the president to adjust his stance because the negative fallout from the tariffs was hurting key constituencies. According to the publication, discontent over the tariffs, which were imposed on April 2, grew in April, particularly among truckers, dockworkers and small manufacturers. The White House faced criticism from unions and business groups traditionally allied with the Republican Party, along with a drop in Trump’s approval ratings.
On the Chinese side, there is a sense of uncertainty, especially among companies that are heavily dependent on the US market. They are scrambling to find alternatives, but not always successfully. In some regions, local authorities are monitoring the situation daily to prevent bankruptcies and mass layoffs. This also motivates China to seek compromises. As for the negotiations themselves, Beijing initially favored dialogue, so the Geneva talks represent a partial victory for China and a concession by the US.
However, it is too early to speak of a trade peace between the US and China. This is more of a temporary truce. Fundamental contradictions between the two powers remain unresolved, including issues of technological sovereignty, competition for global leadership, and differences in socio-economic systems.