Tariffs Between U.S. And China Are Paused For 90 Days

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Via Flickr
Adé Hennis
May 16, 2025

On Monday, May 13, the White House announced that the U.S. and China will significantly reduce their tariffs for 90 days. The U.S. agreed to drop its 145% tariff on Chinese imports from 145% to 30%, and China will drop its tariffs on U.S. imports from 125% to 10%.

The 30% tariff includes a 20% tax related to fentanyl and a 10% broad-based tax. While the moratorium gives businesses some breathing room, some still plan to raise their prices due to an expected sharp increase in the cost of shipping containers before the pause expires in August.

In late April, consumers saw import fees that doubled subtotal prices from Chinese retailers like Temu and Shein. With businesses stuck in limbo, consumers can expect these cost increases to last.

Austan D. Goolsbee, President of the Federal Reserve Bank of Chicago, warned that even though tariffs are reduced, Fed members are still wary about the economy's future.

“It is definitely less impactful stagflationarily than the path they were on,” said Goolsbee, “yet it’s three to five times higher than what it was before, so it is going to have a stagflationary impulse on the economy. It’s going to make growth slower and make prices rise.

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