The United States and China have agreed to a 90-day suspension of their ongoing trade dispute, which had previously driven tariffs between the two countries to more than 100%.

Following a weekend of negotiations, both sides announced that tariffs imposed since April 2 — which had reached as high as 125% on some goods — would be largely rolled back. A reduced 10% tariff will remain in place from each country during the suspension period.

The U.S. will also continue enforcing a separate 20% tariff introduced earlier this year in response to the fentanyl crisis. As a result, total U.S. tariffs on Chinese imports will now stand at 30%, while China’s tariffs on American goods will drop to 10%.

In a statement, the White House emphasized the importance of the agreement, noting it reflected “the importance of their bilateral economic and trade relationship to both countries and the global economy,” as well as the shared goal of a “sustainable, long-term, and mutually beneficial” trade partnership.

In anticipation of potential tariff increases, many companies had accelerated shipments in recent weeks, a strategy known as front-loading. As a result, inventories are expected to remain healthy for the near future.

Although the deal does not appear to reverse the removal of the de minimis exemption — which had previously allowed low-value parcels from China to enter the U.S. duty-free — it does significantly lower the duty rate applied to these shipments.

The air cargo industry has voiced concern that high tariff levels and increased customs scrutiny on e-commerce parcels from China could lead to a sharp drop in volumes and excess airfreight capacity. Recent market data appeared to support this trend, particularly in the transpacific trade lane.

As part of the agreement, the U.S. and China will establish a formal mechanism to continue trade discussions beyond the 90-day suspension.

This move follows similar temporary suspensions of tariffs the U.S. has granted to other countries with which it has trade imbalances.

Source: aircargonews.com