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90 Days Without Tariffs, Not Without Risk


Globe, American and Chinese flags with a shipping port backdrop. Text reads: 90 Days Without Tariffs, Not Without Risk. Mood: informative.

In May 2025, the first US-China talks since Trump’s return to the White House ended with a 90-day truce: no new tariffs, and a pause on further escalation.

Markets rallied immediately. Nearly $600 billion in trade had been disrupted by the standoff, forcing supply chain overhauls and triggering job losses across sectors.

 

Tariffs Cut, But Pressure Remains

Under the deal, the US slashed last month’s new tariffs from 145% to 30%. China lowered its retaliatory tariffs from 125% to 10%. Beijing also lifted export restrictions on rare earths and magnets—key materials for electronics and automotive production.

However, older tariffs remain untouched: 25% on industrial goods, 100% on EVs, 50% on solar products. For businesses, this isn’t full relief—just a partial rollback. Cost pressure is far from over.

 

Market Up, Business Cautious

The S&P 500 and Nasdaq surged, but companies stayed cautious. Retailers like Abt Electronics are still offloading stockpiled inventory. Ports report little change in shipment activity. A 30% tariff is better—but still high.

Most firms are holding back. With policy direction still unclear, no one’s rushing into new commitments.

 

Trump’s Unpredictability Fuels Planning Risk

Trump called the deal a win, citing China’s “full market opening.” But his on-and-off approach worries business leaders. Just last month, he eased tariffs on most countries—except China.

Short-term, this may aid negotiations. Long-term, it creates chaos: businesses can’t plan when policy shifts overnight.

Treasury Secretary Scott Bessent admitted it could take years to fix the trade relationship.

 

The Real Issues Aren’t Resolved

The core problems remain:

  •  A persistent US-China trade imbalance

  •  No coordination on fentanyl enforcement

  •  China’s industrial subsidies untouched

This truce is a temporary fix, not a breakthrough. Tariff risks could return fast.

 

What Businesses Should Do Now

No next meeting is set, but both sides say they’ll keep talking—and don’t want a full decoupling.

For now, businesses should:

  •  Time orders carefully to use the tariff window

  •  Preserve cash flow and avoid aggressive expansion

  •  Prepare fallback plans for possible tariff rebounds

  •  Watch supply risks in rare earths, magnets, and EV parts

 

 

 
 
 

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