After agreement on tariff reduction, trade between China and America is likely to become normal
14-May-2025 09:00 PM
Shanghai. A fierce tariff war had been ongoing between the United States and China, which severely affected imports and exports between the two countries and also led to a decline in revenue. Chinese importers had stopped buying soybean, corn, and wheat from the US. As a result, China's total soybean imports in April 2025 dropped to the lowest level in the past 10 years.
Talks were recently held in Geneva between the world's two largest economies to address the tariff issue. Both sides agreed to temporarily reduce customs duty rates significantly.
Under the agreement, the US will reduce import duties on Chinese goods from 145 percent to 30 percent, while China will cut import duties on American products from 125 percent to 10 percent. A joint statement confirmed that this decision will come into effect from May 14.
Experts note that the US President has come to terms with the reality that using tariffs to pressure China is no longer effective, as China has found reliable alternatives for many American goods.
For instance, it can import soybean from Brazil, wheat from Australia and Russia, and maize from Brazil, Argentina, and Ukraine. For peas and lentils, China also has the option of importing from Russia and Australia. Before the trade war began, the US was the largest exporter of soybean to China, and China was also a major buyer of American maize.
On the other hand, China was equally affected by losing access to the US market. Replacing such a significant market proved difficult, especially for products previously exported to the US in large quantities. Both countries find themselves in a position of mutual dependence.
The US President, driven by economic considerations, recognized the cost of the tariff war and agreed to reduce tariffs in coordination with China.
The agreement includes a three-month window for further review and adjustments. During this period, both countries are expected to continue their dialogue and possibly arrive at a permanent solution.