US-China Trade Thaw Begins: Tariffs Slashed, Boeing Ban Lifted in Major Breakthrough
May 13, 2025 By MarketDepth
In a major step toward easing trade tensions, the U.S. government announced sweeping reductions in tariffs on Chinese goods, signaling a renewed willingness to stabilize economic relations between the world’s two largest economies.
On Monday, the White House issued an executive order lowering the “de minimis” tariff rate on goods shipped from China from 120% to 54%, while introducing a $100 flat fee effective May 14. This move is part of a broader 90-day pause on most tariffs agreed upon by both nations following high-level weekend negotiations.
The joint statement released after the talks revealed significant cuts to wide-ranging tariffs: the U.S. dropped its average tariff rate from 145% to 30%, while China trimmed its own from 125% down to 10%.
“The outcome of the weekend meetings shows a clear mutual desire to avoid full economic decoupling,” U.S. Treasury Secretary Scott Bessent stated on Monday. “These extreme tariffs had started to resemble an embargo — and neither side benefits from that. What we want is fair, open trade.”
Markets responded enthusiastically on Monday, with investor sentiment buoyed by what some are calling a “Buy American” revival. However, the momentum cooled slightly on Tuesday, even as new inflation data showed consumer prices increasing at their slowest pace since early 2021 — during the height of Trump-era tariffs.
In another significant development, Chinese regulators lifted their ban on Boeing (NYSE: BA) aircraft deliveries, opening the door for renewed aerospace trade between the two countries.
The thaw in U.S.-China relations follows a series of fast-moving diplomatic and economic developments. Just last week, former President Trump announced a trade agreement with the United Kingdom — the first such deal since his administration implemented a wave of “reciprocal” tariffs across multiple global partners in early April.
With President Trump expected to speak with Chinese President Xi Jinping later this week, observers are hopeful that this 90-day window may lead to a more permanent resolution to the long-standing trade conflict.
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