On May 12, 2025, during the Sino-US economic and trade talks in Geneva, the United States reached an important consensus with China to reduce tariffs on Chinese goods to 10%. This move has attracted global attention. The significant reduction in tariffs not only marks a crucial turning point in Sino-US trade relations but also reflects the multiple economic and political considerations of the United States.
Economic Pressures Leading to a Change of Course
The Trump administration’s previous policy of imposing tariffs on Chinese goods was an attempt to reduce the US trade deficit through trade protectionism. However, the actual effects have been counterproductive. The high tariffs have not only failed to effectively address the US trade issues but have also had many negative impacts on the US domestic economy. Inflationary pressures in the United States have been rising continuously, and the burden on ordinary consumers and businesses has increased. According to estimates by the Yale University Budget Lab, the implementation of “reciprocal tariffs” would expand the increase in the Personal Consumption Expenditures (PCE) price index to 2.1%. American low-, middle-, and high-income families would lose an average of $1,300, $2,100, and $5,400, respectively. Moreover, the goal of bringing US manufacturing back has not been achieved. Instead, some companies have faced higher production costs and the risk of supply chain disruptions.
Constraints of Political Factors
The Trump administration’s softening stance on China tariffs is also closely related to the domestic political situation in the United States. With the 2026 midterm elections approaching, the Republican Party needs to adjust its policies to address voter pressure. The economic difficulties and public discontent caused by the high tariffs have forced the Trump administration to re-evaluate its trade strategy. In addition, there are also differences within the Trump administration regarding tariff policies. Treasury Secretary Besent and other officials are more inclined to adopt a flexible approach rather than aggressive trade protectionism.
A Temporary Thaw in Sino-US Trade Relations
The reduction of tariffs is an important sign of a temporary thaw in Sino-US trade relations. Although the US tariffs on China have been significantly reduced from 145% to 10%, both sides still retain certain tariffs as bargaining chips for negotiations. In the next 90 days, the two sides will continue in-depth consultations on economic and trade issues, which indicates that both sides are willing to resolve trade disputes through dialogue and consultation. However, this thaw does not mean a fundamental change in Sino-US trade relations. There are still many voices in the United States calling for a tough stance against China, especially in high-tech fields and industrial policies. The structural contradictions between China and the United States still exist.
Impact on the Global Trade Landscape
The significant reduction of US tariffs on China also has an important impact on the global trade landscape. On the one hand, this move helps to ease global trade tensions and stabilize global economic growth expectations. On the other hand, the adjustment of US tariff policies has also attracted the attention of other countries. Japan, South Korea, the European Union, and other economies may further adjust their trade strategies after seeing the softening of US tariffs on China.
Conclusion
The Trump administration’s reduction of China tariffs to 10% is the result of both economic pressures and political factors. Although this move has eased Sino-US trade tensions to some extent, the structural contradictions between China and the United States still exist. In the future, the two sides still need to continue dialogue and consultation to seek a more balanced and sustainable trade relationship.