- On May 12, President Trump announced a trade agreement with China aimed at de-escalating trade tensions, which includes the removal of additional tariffs imposed on China in April 2023, while retaining earlier tariffs such as Section 301 and Section 232 tariffs. The U.S. will reduce tariffs on many Chinese goods from 145% to a baseline of 10%, with an additional 20% layered tariff during a 90-day pause.
- In response, China will lower its tariffs on American goods to 10% and eliminate recent retaliatory tariffs and non-tariff measures. Both countries will establish a formal mechanism for ongoing trade discussions and work together to control the flow of fentanyl and its precursors from China to North America.
- The agreement significantly impacts supply chain costs and market access, providing relief to companies by reducing tariffs and creating stability for business planning. Companies should assess the implications for their operations, monitor ongoing negotiations, and enhance compliance processes in light of increased customs enforcement and regulatory scrutiny.
Source PwC
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