U.S. and China Announce Joint Statement on Trade: Key Highlights

In a significant move, the United States and China have jointly agreed to modify tariffs and ease trade tensions. Both countries released official statements on May 12, 2025, outlining steps to revise additional ad valorem tariffs and suspend certain non-tariff countermeasures.

This new agreement marks a major step toward stabilizing trade relations between the world’s two largest economies.

What Did the U.S. Announce?

The U.S. government said it will:

Modify additional tariffs on Chinese goods.

Specifically, it will suspend 24 percentage points of the additional ad valorem duty (extra tax on imported goods) for 90 days.

This suspension applies to tariffs that were imposed through Executive Orders 14259 and 14266 issued on April 8 and 9, 2025.

The U.S. will also remove or suspend non-tariff countermeasures taken against China since April 2, 2025.

A mechanism will be established to continue discussions on economic and trade issues.

What Did China Announce?

According to the Chinese Commerce Ministry, China will:

Suspend 24% of its additional ad valorem tariffs on U.S. goods for an initial 90-day period.

Retain the remaining 10% tariff during this time.

Adopt all necessary administrative measures to suspend or remove non-tariff actions taken against the U.S. since April 2, 2025.

Work closely with the U.S. to establish a mechanism for future trade discussions.

Conduct working-level consultations on key economic and trade issues, which may be held in China, the U.S., or a third country based on mutual agreement.

Appoint He Lifeng as the official representative from China for these trade discussions.

Commit to implementing all actions by May 14, 2025.

China to Impose 10% Tariffs on U.S. Goods, Suspend Additional 24% Tariffs for 90 Days, and Remove Remaining 91% Tariffs, According to Commerce Ministry Estimates.

Why This Matters

This joint statement shows that both countries are ready to rebuild trust and resolve trade issues peacefully. Suspending parts of the tariff hikes and non-tariff barriers will:

Help reduce trade tensions between the U.S. and China.

Support global trade stability.

Offer relief to importers, exporters, and consumers in both countries.

What Are Ad Valorem Tariffs?

An ad valorem tariff is a type of tax imposed on imported goods, calculated as a percentage of the item’s value. For example, a 24% ad valorem duty means you must pay 24% of the item’s price as tax. These tariffs are often used during trade disputes to protect local industries or respond to unfair trade practices.

What Happens Next?

The two sides have 90 days to assess the impact of these changes.

They will use this time to hold regular discussions and possibly extend or revise the suspension.

If progress is made, more tariff reductions or removals could follow.

Conclusion

The joint U.S.-China trade statement is a positive step toward lowering tariffs, removing trade barriers, and improving relations. With mechanisms now in place for continued talks and cooperation, businesses and global markets will be watching closely for further developments. Both countries have shown willingness to act fast—all measures will begin by May 14, 2025.

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