us-china trade war: trump claims breakthrough, tariffs slashed
Washington, D.C., Tuesday, 13 May 2025.
president trump announced china has agreed to open its markets to american businesses. this follows a deal to temporarily reduce tariffs. the us will reduce tariffs to 30% from 145%, while china will lower them to 10% from 125%. the agreement includes a 90-day pause on trade barriers. trump says tariffs won’t return to previous highs, even if a long-term deal isn’t reached. however, he says they could still increase substantially. the deal, set to begin wednesday, could ease tensions and impact semiconductor companies reliant on us-china trade.
tariff reductions and market access
The U.S. will reduce tariffs on Chinese goods to 30%, a significant decrease from the previous 145% [1][2]. China will reciprocate by lowering tariffs on U.S. goods to 10%, down from 125% [1][2]. This agreement, which includes a 90-day pause on most trade barriers, is scheduled to commence on Wednesday [1][2]. President Trump emphasized that even if a longer-term deal isn’t achieved within this period, tariffs will not revert to the prior levels, though they could still increase [1]. The Chinese Embassy has not yet commented on these developments [1][2].
investor sentiment and semiconductor impact
The tariff reductions and promises of market opening could improve investor confidence, particularly for companies in the semiconductor industry [1]. These companies heavily rely on trade between the U.S. and China [1]. However, the sustainability of this positive momentum depends on both countries adhering to the agreed terms and making further progress towards a comprehensive trade agreement [7]. Investors should closely monitor trade data and policy pronouncements for confirmation of these trends [alert! ‘No specific data available in sources to quantify the impact on semiconductor companies’].
expert opinions and market reaction
Treasury Secretary Bessent stated that neither the U.S. nor China wants to decouple, emphasizing the commitment to more balanced trade [7]. Jamieson Greer noted the speed at which consensus was reached suggests that the differences between the two nations may not be as significant as previously thought [7]. Vice Premier of China, He Lifeng, described the trade talks as constructive and acknowledged that an important consensus was achieved [7]. However, some analysts remain cautious, suggesting that these discussions are merely exploratory and substantive agreements may be difficult to achieve in the short term [7].
concerns and uncertainties
Despite the announced tariff reductions, the U.S. will maintain 20% tariffs related to fentanyl and existing tariffs on steel and aluminum [1][2]. This move indicates a continued focus on specific trade concerns [1][2]. Wendy Cutler from the Asia Society Policy Institute cautioned that 90 days is insufficient to address the complex trade issues between the U.S. and China, including manufacturing overcapacity and subsidies [8]. The sustainability of this agreement remains uncertain, and businesses are wary of making long-term decisions based on a temporary truce [8].