The Tariff Times – U.S. temporarily reducing tariffs on China from 145% to 30%

• “Wait. What just happened?“
• Tariffs on Chinese imports will be reduced from 145% to 30% following negotiations in Switzerland.
• China will reduce tariffs on US goods to 10%.
• This is a temporary pause for 90 days, set to take effect on/by Wednesday (5/14/25)
• This pause is separate from April’s 90 day pause for countries not named China.

“That’s good, isn’t it? Will prices still go up?”

• The original Liberation Day reciprocal tariffs on Chinese imports were 34%.
• They are now 30%.
• The de minimis exemption for Made in China goods is still dead, and“more than 80% of total US e-commerce shipments in 2022 were de minimis imports, the vast majority of which come from China.” – CNN

“Will there still be empty shelves?”

• Incoming shipments on the west coast dropped significantly over the last month. The very first ships carrying goods subject to the 124% tariff landed just last week.
• Big companies were able to rush to stock up, so they might be able to manage.
  • 5/15 UPDATE: Walmart just said price hikes due to tariffs may start later this month. Their CFO said “the magnitude of these increases is more than any retailer can absorb… It’s more than any supplier can absorb.” So it sounds like even the very biggest of the big are struggling with this historically high tariff policy shock.
• For smaller businesses, the supply shock & tariff spike could be disastrous as they’re less able to manage the cash flow disruption.

“Anything else?”

• Today’s news is “just” about China. The rest of the world remains at 10%, with the large Liberation Day reciprocal tariffs set to be reimposed in early July.
• There’s an obscure federal court which could potentially halt the tariffs altogether. They start hearing arguments this week.
• Planet Money did a great podcast on just what “Made in China” actually means:

(Very top image: by Maksym Tymchyk on Unsplash)