China Reduces Tariffs on U.S. Goods: Big Boost for Global Trade

In a major move that could ease global trade tensions, China has announced significant changes to its tariff policy on U.S. goods. The Chinese Ministry of Finance said the new changes will take effect from May 14, 2025.

Key Announcements by China:

Tariff cut from 34% to 10%: China will reduce its 34% tariffs on certain U.S. goods to just 10%.

Pause on 24% tariffs: A 24% tariff rate on some U.S. goods will be suspended for 90 days.

Removal of extra tariffs: China will cancel additional tariffs that were imposed during two later rounds of the U.S.-China trade conflict.

Why It Matters

According to China’s Finance Ministry, these changes aim to support producers and consumers in both countries. The reduction in trade barriers is expected to promote smoother economic and trade relations between China and the U.S..

This move is seen as a step towards easing the ongoing trade tensions and could help revive international trade and boost investor confidence.

Market Reaction

Following the news, the Nasdaq 100 Index gained 1.3%, putting it on track to recover all of its 2025 losses. Investors seem optimistic that the tariff relief will help global supply chains and support corporate earnings.

S&P 500 has now turned positive for the year, meaning it’s showing an overall gain. Since hitting its lowest point in April, the index has climbed by more than 1,000 points.

Conclusion

The tariff reduction is a positive development for businesses, consumers, and markets in both countries. It may also set the stage for more cooperation between the world’s two largest economies.Stay tuned for more updates on U.S.-China trade and how it impacts the global economy.

Update

China has cut extra tariffs on US imports from 34% to 10%, starting 12:01 pm (Beijing time) on Wednesday. The remaining 24% tariffs are suspended for 90 days. Also, the counter-tariffs listed in Announcements No. 5 and 6 [2025] are now ended. This follows agreements made at recent China-US talks in Geneva.

Update

Citigroup has upgraded its projection for China’s 2025 GDP growth to 4.7%, up from 4.2%, following the recent trade agreement between the U.S. and China.