There has been some recent good news with respect to tariffs which is that the U.S. and China announced an agreement effective May 14, 2025. According to the White House newsletter, “On the heels of the brand-new deal with the United Kingdom, President Donald J. Trump reached an agreement with China to reduce China’s tariffs and eliminate retaliation, retain a U.S. baseline tariff on China … In reaching an agreement, the United States and China will each lower tariffs by 115% while retaining an additional 10% tariff. Other U.S. measures will remain in place.” Fact Sheet
According to the administration, the U.S will retain all duties imposed on China prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs, tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and Most Favored Nation tariffs. This also includes the elimination of Section 321 of the Tariff Act of 1930 for China and Hong Kong imports. Section 321 allows for the informal entry of articles are valued at $800 or less. The Section 321 shipments are generally duty and tax free, and importers of these shipments benefit from expedited customs release.
As part of the agreement. China will also suspend its initial 34% tariff on the United States but will retain a 10% tariff during the period of the pause.
In summary, U.S. importers should plan on China tariffs and other China-related actions now through at least 2028. Importers should also expect to see a negotiable 25% tariff on Canada and Mexico, except for goods qualifying for USMC, which is scheduled now through 2026. For the other trading partners, anticipate the possible outcome of negotiable reciprocal tariffs based on the partners and market reactions.