Introduction
U.S. and China Slash Tariffs: In a significant development in international trade relations, the United States and China have agreed to a 90-day reduction in tariffs, marking a temporary truce in their ongoing trade conflict. This agreement, reached after intensive negotiations in Geneva, reduces U.S. tariffs on Chinese goods from 145% to 30% and lowers China’s tariffs on U.S. goods from 125% to 10% . The truce aims to provide a window for both nations to negotiate a more permanent resolution to their trade disputes.
This temporary agreement is not just a matter of economic policy but also intersects with legal frameworks, constitutional considerations, and broader societal impacts. It raises questions about the extent of executive power in trade negotiations, the role of international law in bilateral agreements, and the implications for global economic stability.
“This truce is a pivotal moment, reflecting the intricate balance between economic interests and geopolitical strategies,” notes Dr. Eleanor Chen, Professor of International Trade Law at Harvard University.
Legal and Historical Background
Legal Frameworks Governing Trade
The U.S. Constitution grants Congress the power to regulate commerce with foreign nations (Article I, Section 8). However, over time, Congress has delegated significant authority to the executive branch. Key legislative acts include:
Trade Act of 1974: Allows the President to impose tariffs and other trade restrictions to protect American industries.
International Emergency Economic Powers Act (IEEPA): Grants the President authority to regulate commerce after declaring a national emergency in response to any unusual and extraordinary threat.
These laws have been instrumental in shaping the U.S. approach to international trade, providing the executive branch with tools to respond swiftly to global economic challenges.
Historical Context of U.S.-China Trade Relations
The U.S.-China trade relationship has evolved over decades, marked by periods of cooperation and tension. Notable milestones include:
2001: China’s accession to the World Trade Organization (WTO), leading to increased trade flows between the two nations.
2018-2020: Escalation of trade tensions under the Trump administration, resulting in significant tariffs on both sides.
2025: The recent agreement to reduce tariffs temporarily, aiming to de-escalate ongoing trade disputes.
Legal scholars have debated the constitutionality of the executive branch’s expansive role in trade policy. “The delegation of trade authority to the President has led to a concentration of power that may challenge the checks and balances envisioned by the framers,” argues Professor Jonathan Michaels in the Yale Law Journal.
Case Status and Legal Proceedings
The current 90-day tariff reduction is the result of executive action, specifically an agreement between the U.S. President and Chinese leadership. While this move has immediate economic implications, it also raises legal questions:
Executive Authority: The President’s ability to unilaterally adjust tariffs without Congressional approval is grounded in the aforementioned legislative acts. However, this authority is not absolute and may be subject to judicial review.
International Law: The agreement must align with WTO rules and other international trade obligations. Any perceived violations could lead to disputes within international legal forums.
Legal analysts are closely monitoring the situation. “While the executive has broad discretion, any long-term changes to trade policy should involve Congressional input to ensure democratic legitimacy,” notes Linda Thompson, Senior Fellow at the Center for International Trade Law.
Viewpoints and Commentary
Progressive / Liberal Perspectives
Progressive commentators express cautious optimism about the tariff reduction but emphasize the need for a more comprehensive and equitable trade policy.
“Reducing tariffs is a step in the right direction, but we must ensure that future agreements prioritize labor rights, environmental standards, and economic justice,” says Senator Maria Lopez (D-CA).
Advocacy groups like the Fair Trade Coalition argue that trade policies should be transparent and inclusive, involving stakeholders from various sectors to create sustainable economic growth.
Conservative / Right-Leaning Perspectives
Conservative voices highlight the strategic advantages of the temporary truce, viewing it as a tactical move to strengthen the U.S. position in ongoing negotiations.
“This agreement demonstrates the effectiveness of a firm stance in trade negotiations. It provides leverage to address longstanding issues like intellectual property theft and market access,” asserts Representative James Whitaker (R-TX).
Think tanks such as the Heritage Foundation advocate for trade policies that prioritize national security and economic sovereignty, cautioning against over-reliance on international institutions.
Comparable or Historical Cases
The current temporary trade truce between the United States and China mirrors several historical episodes in which trade tensions between major powers were addressed through negotiation and calibrated de-escalation. Two particularly instructive precedents include the 1980s U.S.-Japan trade conflict and the evolution of the North American Free Trade Agreement (NAFTA).
U.S.-Japan Trade Tensions in the 1980s
During the 1980s, the United States faced a soaring trade deficit with Japan, particularly in automobiles and electronics. The U.S. accused Japan of unfair trade practices and limited market access. This culminated in bilateral negotiations resulting in voluntary export restraints (VERs), whereby Japan limited auto exports to the U.S. to avoid more punitive tariffs. The arrangement diffused tensions without full-scale economic decoupling.
“The U.S.-Japan VERs were less about long-term resolution and more about political optics and short-term stabilization,” wrote Professor Richard Caves in the Journal of Economic Perspectives. While they provided temporary relief to U.S. automakers, critics noted these measures lacked structural reforms and set precedents for politically motivated trade action.
NAFTA and Its Successor USMCA
NAFTA, signed in 1994, created a trilateral trade bloc between the U.S., Canada, and Mexico, eliminating most tariffs and trade barriers. While it led to greater economic integration, NAFTA also ignited political opposition, particularly from labor unions and environmentalists who argued the pact encouraged job offshoring and regulatory weakening.
In 2020, the Trump administration renegotiated NAFTA into the United States-Mexico-Canada Agreement (USMCA), which added new labor, environmental, and digital trade provisions. The transition from NAFTA to USMCA illustrates how trade agreements evolve over time in response to political pressures and shifting global standards.
“The NAFTA-USMCA transition demonstrated that multilateral trade agreements can adapt to modern policy demands while maintaining market stability,” noted Dr. Isabel Moreno, legal fellow at the Brookings Institution.
The U.S.-China tariff détente may similarly evolve into a larger framework, provided both parties show flexibility and political will. What remains critical, as history suggests, is institutionalizing any trade gains through enforceable legal instruments rather than relying solely on executive discretion.
Policy Implications and Forecasting
The short-term tariff reductions agreed to by the U.S. and China offer immediate economic reprieve, but they also pose a series of complex policy questions regarding executive authority, international economic governance, and long-term strategic alignment. Analysts are cautiously optimistic, but underline the impermanence of such ceasefires in the absence of binding agreements.
Short-Term Economic Relief
The immediate consequence of the tariff rollback is a surge in market confidence. Major U.S. stock indices, including the S&P 500 and Dow Jones, climbed after the announcement. Importers and exporters in both countries expect reduced logistical costs and improved profit margins over the next quarter.
“Temporary de-escalation relieves pressure on global supply chains, which have already been reeling from pandemic-related disruptions,” observed Dr. Martina Feldman, senior analyst at the World Trade Observatory.
Yet this relief may be fleeting. If negotiations falter, tariffs could rebound, exacerbating market volatility and global economic uncertainty.
Strategic and Legal Considerations
From a legal standpoint, the truce reiterates the expansive power of the executive branch in conducting foreign trade policy, raising concerns about Congressional sidelining. Without a formal treaty or Congressional ratification, the truce lacks the legal permanence required to ensure predictability.
“Congress must reclaim its constitutional role in trade policymaking if long-term agreements are to reflect democratic legitimacy,” asserts Representative Marcy Kaptur (D-OH), a long-time critic of executive-driven trade actions.
Long-Term Policy Forecast
Looking forward, experts foresee a few plausible scenarios:
- Comprehensive Bilateral Agreement: Negotiations result in a legally binding trade pact addressing not only tariffs, but also intellectual property rights, subsidies, and digital commerce.
- Return to Escalation: Talks stall, prompting both nations to reinstate or even escalate trade barriers.
- Multilateral Realignment: Other nations capitalize on U.S.-China frictions by establishing alternative trade blocs that marginalize both powers.
Institutions like the Peterson Institute for International Economics advocate for a rules-based framework aligned with World Trade Organization (WTO) standards. “Strategic trust can only be built through verifiable commitments and third-party adjudication,” remarks Dr. Melinda Watts, senior fellow at Peterson.
In sum, while the current truce is politically and economically expedient, its success depends on whether it catalyzes enduring structural reforms and institutionalized cooperation.
Conclusion
The 2025 U.S.-China trade truce, marked by mutual tariff reductions, signifies a pivotal—albeit temporary—shift in global economic diplomacy. It comes amid rising concerns over economic decoupling, geopolitical polarization, and the expanding use of trade as a geopolitical lever. Though it provides short-term relief, the agreement raises profound legal, constitutional, and strategic questions about how the United States—and its democratic institutions—manage long-term trade relationships.
At its core, this episode highlights an imbalance in constitutional governance. The executive branch’s expansive trade authority—enabled through statutes like the Trade Act of 1974 and the IEEPA—has largely circumvented legislative oversight. While these powers allow agility in international negotiations, they also risk undercutting the deliberative role of Congress and the transparency necessary for sustainable policy.
Progressive and conservative perspectives both add depth to this tension. Progressives warn against secretive dealmaking that may overlook labor rights, climate goals, and equitable development. Conservatives, on the other hand, argue that strong executive action is essential to safeguarding national interests and maintaining leverage against economic adversaries.
“True democratic governance in trade must reconcile flexibility with accountability,” states Professor Li Zhang, Director of International Legal Studies at NYU Law. “Without durable legal foundations, even the most pragmatic agreements are subject to reversal.”
The historical precedents from U.S.-Japan tensions to NAFTA’s transformation into USMCA remind us that durable economic policy evolves through institutional resilience, not just executive fiat. Similarly, the path forward with China must navigate domestic legal reform, international legal norms, and the ever-evolving calculus of global markets.
As the 90-day clock ticks down, the key question emerges: Will this truce be remembered as a turning point toward cooperative globalization or just another pause in a protracted economic rivalry?
Future policymaking must engage this question fully, ensuring that trade not only benefits markets—but also reflects the constitutional, ethical, and legal commitments of a democratic society.
For Further Reading:
- Business Insider: “What Wall Street’s bright minds think about the US-China trade deal”
https://www.businessinsider.com/us-china-trade-deal-tariffs-trade-war-outlook-wall-street-2025-5 - The Wall Street Journal: “China Exults in Trump’s Tariff Pullback”
https://www.wsj.com/world/china/china-exults-in-trumps-tariff-pullback-8ca19720 - The Guardian: “US to slash tariff on small China parcels from 120% to 54%”
https://www.theguardian.com/us-news/2025/may/13/us-cut-tariff-small-china-parcels-de-minimis-shein-temu - The Economic Times: “Trade thaw offers 90-day reprieve as US, China seek off-ramp from economic decoupling”
https://economictimes.indiatimes.com/opinion/et-editorial/trade-thaw-offers-90-day-reprieve-as-us-china-seek-off-ramp-from-economic-decoupling/articleshow/121145375.cms - The Australian: “Tariffs and lies: Trump and Xi both buckled – we should be grateful they did”
https://www.theaustralian.com.au/business/who-buckled-trump-or-xi-they-both-did-but-this-is-still-a-pretty-trumpy-deal/news-story/8ddb878b1116e30afd3c2d82e6c1fd3d