US-China tariff pause and reduction

The US and China have mutually agreed a temporary reduction in tariffs for 90 days from 14 May 2025. This is intended to allow wider negotiations to take place.

Impact of US-China tariffs on UK businesses

UK businesses may benefit from these changes if they export-Chinese origin goods to the US, export US origin goods to China or have Chinese or US business in their global supply chains. We expect reduced tariffs and costs for the duration of the pause.

What is changing with the US-China tariffs?

Both parties will reduce the tariffs currently applying to most imports by 115%.

For Chinese origin imports into the US, this will lower the minimum tariffs applied to most goods from 145% to 30%.

The “reciprocal” tariff rates are effectively on hold, with China now subject to the same 10% baseline rate that the US has been seeking to apply globally. As a reminder, most global imports into the US, including UK origin goods, are currently subject to a 10% tariff. While not applying to the UK, many countries and territories (such as the EU, Japan etc) were originally due to be subject to higher “reciprocal rates”. These were then put on hold until 9 July 2025.

The US pause on tariffs on Chinese origin goods does not include many of the other new and existing tariffs that have been implemented. Separate steel and aluminium, automotive and pre-existing most favoured nation tariffs will still apply. A 20% US tariff on Chinese goods in response to the Fentanyl crisis will also remain. This means a minimum 30% duty will apply to most Chinese goods with the effective duty rate potentially higher depending on the classification of the goods being imported.

In response, China will reduce its additional retaliatory tariffs on US origin goods, from 125% to 10%.

The agreement is being hailed as a reset in relations. It may be the first step towards de-escalating the current trade conflict.

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