Introduction
On May 12, 2025, the United States and China announced a significant development in their ongoing trade relations: a 90-day Tariff pause in the escalating tariff war that had strained global markets and bilateral ties. This agreement, reached during talks in Geneva, entails a substantial reduction in tariffs, with the U.S. lowering duties on Chinese goods from 145% to 30%, and China reducing tariffs on U.S. imports from 125% to 10%.
The trade war, initiated during President Donald Trump’s first term and intensified upon his re-election, has been characterized by a series of tit-for-tat tariffs, impacting various sectors including technology, agriculture, and manufacturing.
The 90-day truce aims to provide a window for both nations to negotiate a more comprehensive trade agreement, addressing underlying issues such as intellectual property rights, market access, and trade imbalances.
“This pause offers a critical opportunity for both nations to recalibrate their trade strategies and work towards a sustainable economic partnership,” said Dr. Emily Chen, Senior Fellow at the Center for Strategic and International Studies.
Legal and Historical Background
Legal Framework
The U.S.-China trade tensions are governed by various legal instruments, including the Trade Act of 1974, which grants the U.S. President authority to impose tariffs under Section 301 in response to unfair trade practices. Additionally, the International Emergency Economic Powers Act (IEEPA) allows the President to regulate commerce after declaring a national emergency.
In the context of international law, the World Trade Organization (WTO) provides a platform for dispute resolution, though its effectiveness has been challenged in recent years.
Historical Context
The trade war commenced in 2018, with the U.S. imposing tariffs on Chinese goods, citing unfair trade practices and intellectual property theft. China retaliated with its tariffs, leading to a cycle of escalating duties. Efforts to negotiate a resolution have been intermittent, with temporary agreements failing to address core issues.
“The cyclical nature of these trade disputes underscores the need for a more structured and legally binding agreement,” noted Professor James Li, International Trade Law Expert at Harvard Law School.
Case Status and Legal Proceedings
The current 90-day pause is a result of high-level negotiations between U.S. and Chinese officials in Geneva. While not a legally binding treaty, the agreement reflects a mutual understanding to de-escalate tensions and work towards a comprehensive trade deal .
No formal legal proceedings are underway; however, both nations have indicated a willingness to engage in further talks. The U.S. Trade Representative’s office has stated that the pause is contingent upon progress in addressing key issues.
“This truce is a diplomatic maneuver rather than a legal resolution, highlighting the complexities of international trade negotiations,” commented Laura Martinez, Trade Policy Analyst at the Brookings Institution.
Viewpoints and Commentary
Progressive / Liberal Perspectives
Progressive commentators have expressed cautious optimism regarding the tariff pause. They emphasize the importance of addressing labor rights, environmental standards, and equitable economic policies in any future agreement.
“While the pause is welcome, it’s imperative that negotiations prioritize human rights and sustainable development,” stated Representative Alexandria Ocasio-Cortez.
Labor unions have also weighed in, advocating for protections against outsourcing and ensuring that trade policies benefit American workers.
“Trade agreements must include enforceable labor standards to prevent a race to the bottom,” urged Richard Trumka Jr., President of the AFL-CIO.
Conservative / Right-Leaning Perspectives
Conservative voices have lauded the tariff pause as a strategic move to strengthen the U.S. negotiating position. They argue that the tariffs have been effective in bringing China to the table and addressing long-standing trade imbalances.
“The President’s firm stance has compelled China to reconsider its unfair trade practices,” said Senator Tom Cotton.
Business groups aligned with conservative policies have highlighted the potential economic benefits of reduced tariffs.
“Lower tariffs will alleviate pressure on American businesses and consumers, fostering economic growth,” noted Karen Kerrigan, President of the Small Business & Entrepreneurship Council.
Comparable or Historical Cases
The U.S.-China trade tensions and the recent 90-day tariff pause can be better understood by examining analogous historical episodes in American trade policy. Two particularly instructive examples include the U.S.-Japan trade conflicts of the 1980s and the renegotiation of NAFTA, which led to the United States-Mexico-Canada Agreement (USMCA) under the Trump administration.
During the 1980s, the United States experienced a surge in trade imbalances with Japan, especially in the automotive and electronics sectors. In response, the Reagan administration imposed tariffs and negotiated “voluntary export restraints” (VERs) with Tokyo. The arrangement was less about punishment and more about pressuring Japan to open its markets to U.S. products. Over time, these agreements led to modest reforms, but they also sparked long-term diplomatic friction. “The U.S.-Japan trade tensions taught us that structural trade issues require structural policy responses,” noted Dr. Clyde Prestowitz, former U.S. trade negotiator.
More recently, the renegotiation of NAFTA into the USMCA offers a compelling modern parallel. The Trump administration criticized NAFTA for disadvantaging American workers and leveraged the threat of tariffs to bring Mexico and Canada back to the table. The resulting agreement introduced new labor provisions, intellectual property protections, and digital trade clauses. “The USMCA was a pragmatic reset, reflecting contemporary economic realities,” stated Professor Jennifer Hillman of Georgetown University Law Center.
Both cases share several traits with the current U.S.-China standoff: aggressive executive-driven negotiations, the use of tariffs as leverage, and an emphasis on domestic economic revival. However, unlike with Japan or NAFTA partners, the U.S.-China relationship is overlaid with intense geopolitical rivalry and ideological differences.
A unique challenge in the China context is the role of state-owned enterprises (SOEs) and the Chinese Communist Party’s influence over market activities. Previous precedents offer limited insight into how to address such fundamental systemic differences. “Unlike Japan or Canada, China’s market system is intrinsically tied to political control, complicating any efforts to liberalize trade structures,” commented Dr. Derek Scissors of the American Enterprise Institute.
Thus, while the historical record offers strategic guidance, it also underscores the unprecedented nature of the current dilemma. Effective resolution likely requires a hybrid approach—one that merges aggressive trade tactics with a sustained, multilateral diplomatic framework.
Policy Implications and Forecasting
The implications of the 90-day tariff pause between the United States and China are profound, both in the short and long term. On a tactical level, the agreement has already yielded immediate benefits: stock markets have rebounded modestly, business sentiment has improved, and inflationary pressures from import costs are temporarily reduced. Yet this short-term calm should not be mistaken for resolution.
In the long term, the most pressing policy concern remains whether this truce can transition into a sustainable trade framework. Any future deal must contend with complex issues such as China’s alleged intellectual property violations, forced technology transfers, and non-tariff barriers that distort fair market access. “This is not just a tariff fight; it’s about competing economic systems,” argued Dr. Nicholas Lardy of the Peterson Institute for International Economics.
Another consideration is the durability of unilateral executive actions in setting trade policy. Since the Trump administration, and continuing under his second term, trade diplomacy has increasingly shifted away from multilateral institutions like the World Trade Organization (WTO) toward bilateral power-based negotiations. Critics argue that this weakens international norms and creates global uncertainty. “By bypassing the WTO, the U.S. risks undermining the very institutions it helped build,” warned Susan Esserman, former Deputy U.S. Trade Representative.
Domestically, lawmakers are split on the pause’s implications. Some argue it offers breathing space for recalibrating American manufacturing and strengthening supply chains. Others worry that a temporary truce without structural commitments will embolden China to wait out U.S. political transitions. Congressional oversight of trade policy, especially the limits of Section 301 and the IEEPA, may become a key focus of upcoming legislative sessions.
There are also political implications as the Biden-aligned Democratic opposition frames the truce as a potential capitulation. “Tariff diplomacy may offer momentary relief, but without a coherent long-term vision, it merely resets the clock,” stated Senator Chris Murphy (D-CT).
Globally, allied nations are watching closely. European Union leaders, for instance, fear a bifurcated world economy where global rules are replaced by regional trade blocs. As China also deepens its Belt and Road trade architecture, the future could hold a fragmented trade system increasingly shaped by strategic alliances rather than open markets.
Whether the pause evolves into peace or escalates anew depends on what is negotiated—not just during, but after these 90 days.
Conclusion
The 90-day pause in the U.S.-China tariff war is more than a diplomatic ceasefire—it is a litmus test for the durability of 21st-century trade policy. While the agreement offers much-needed relief to both economies, it also reveals deeper tensions between protectionism and globalization, executive authority and institutional governance, and short-term economic tactics versus long-term strategic planning.
At its core, the U.S.-China economic rivalry is not simply about trade balances or tariff rates; it reflects a clash of governance models. The United States, committed to free enterprise and democratic accountability, finds itself contending with a state-directed, authoritarian capitalist system in China. This structural divergence complicates conventional negotiation methods, making it increasingly difficult to find mutually acceptable terms.
From a constitutional standpoint, the trade war also raises concerns about the concentration of trade authority in the executive branch. Presidential use of Section 301 of the Trade Act of 1974 and the IEEPA underscores how modern presidents can unilaterally impose economic measures with profound global consequences. “Congress must reassert its constitutional role in trade policymaking to ensure accountability,” emphasized Professor Noah Feldman of Harvard Law School.
The divergent viewpoints presented—progressive calls for labor and climate provisions, and conservative arguments for economic sovereignty and national security—underscore the need for a multifaceted solution. Neither purely punitive tariffs nor unrestricted free trade can resolve the current impasse. Instead, the future likely lies in hybrid trade frameworks that prioritize enforcement mechanisms, equitable standards, and multilateral cooperation.
Public trust in economic institutions is also at stake. As trade tensions impact prices, employment, and investment, the American public grows more skeptical of globalization’s benefits. Rebuilding trust will require a transparent, inclusive process that delivers tangible benefits across socioeconomic classes.
Ultimately, the challenge is not just to pause the conflict, but to redefine the terms of engagement. “This is a pivotal opportunity to modernize trade policy for a multipolar world,” concluded Dr. Mireya Solís of the Brookings Institution.
For Further Reading:
- “US and China reach a deal to slash sky-high tariffs for now, with a 90-day pause” – Associated Press
- “China cautiously welcomes pause in US tariff war” – The Guardian
- “JPMorgan cuts the chance of a US recession after Trump and China’s tariff truce — but risks remain” – Business Insider
- “Wall Street’s fear gauge just dropped with striking speed. What historically comes next for stocks?” – MarketWatch
- “Trade War Truce Leaves 30% Tariff On China In Place-Why It Matters” – Investopedia