Introduction
U.S.-China Tariff Reduction: On May 12, 2025, the United States and China announced a significant, albeit temporary, reduction in tariffs, marking a notable de-escalation in their ongoing trade conflict. The agreement entails the U.S. lowering tariffs on Chinese goods from 145% to 30%, while China reduces its tariffs on U.S. goods from 125% to 10%, effective for a 90-day period starting May 14, 2025 . This development follows a series of tit-for-tat tariff increases that have strained bilateral relations and disrupted global supply chains.
The legal and policy frameworks underpinning this agreement are multifaceted, involving domestic trade laws, international trade agreements, and executive powers. In the U.S., the Trade Act of 1974 and the International Emergency Economic Powers Act (IEEPA) grant the President authority to impose tariffs and other trade restrictions. Internationally, both countries are members of the World Trade Organization (WTO), which sets rules for trade between nations and provides a platform for dispute resolution.
The temporary tariff reduction raises several legal and societal tensions. Legally, it tests the limits of executive authority in trade policy and the role of international trade law in resolving disputes. Societally, it impacts domestic industries, consumers, and the broader economy, highlighting the interconnectedness of global trade and national economic health.
“This agreement represents a critical juncture in U.S.-China trade relations, offering a window for negotiation and potential resolution, but also underscoring the fragility of such truces in the absence of structural reforms,” says Dr. Emily Chen, Professor of International Trade Law at Georgetown University.
Legal and Historical Background
The authority of the U.S. President to impose tariffs stems primarily from the Trade Act of 1974, specifically Section 301, which allows the President to take action against foreign trade practices deemed unfair. Additionally, the IEEPA grants the President broad powers to regulate commerce during national emergencies. These statutes have been instrumental in the implementation of tariffs during trade disputes.
Historically, the U.S. has used these powers to address trade imbalances and protect domestic industries. For instance, in the 1980s, the Reagan administration imposed tariffs on Japanese electronics to counteract trade deficits. More recently, the Trump administration utilized these authorities to impose tariffs on steel and aluminum imports, citing national security concerns under Section 232 of the Trade Expansion Act of 1962.
Internationally, the WTO provides a framework for trade relations and dispute resolution. Both the U.S. and China have brought cases against each other before the WTO’s Dispute Settlement Body. However, the effectiveness of the WTO has been questioned, particularly with the U.S. blocking appointments to the Appellate Body, thereby hampering its dispute resolution capacity.
“The reliance on unilateral tariffs undermines the multilateral trading system and sets a precedent that could lead to increased protectionism globally,” notes Dr. Rajiv Malhotra, Senior Fellow at the Brookings Institution.
Case Status and Legal Proceedings
The current tariff reduction agreement is a result of high-level negotiations between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Geneva. While the agreement is not a legally binding treaty, it reflects a mutual understanding to pause escalating tariffs and engage in further negotiations .
The agreement includes the establishment of a consultation mechanism to resolve disputes and the suspension of non-tariff barriers, such as China’s limits on critical mineral exports . However, certain tariffs, particularly those related to national security concerns, such as the U.S. tariffs on steel and aluminum, remain in place.
Legal challenges to the President’s tariff authority have been limited, with courts generally upholding the executive’s broad discretion in matters of foreign commerce. Nevertheless, the temporary nature of the agreement and the lack of a formal treaty raise questions about its enforceability and the potential for future legal disputes.
Viewpoints and Commentary
Progressive / Liberal Perspectives
Progressive commentators and policymakers have expressed cautious optimism about the tariff reduction, viewing it as a step toward de-escalation and a return to multilateral trade norms. They emphasize the need for structural reforms and adherence to international trade rules.
“While the temporary reduction in tariffs is welcome, it is imperative that both nations commit to a rules-based trading system and address underlying issues such as labor rights and environmental standards,” asserts Senator Elizabeth Warren (D-MA).
Labor unions and consumer advocacy groups have also weighed in, highlighting the impact of tariffs on domestic prices and employment. They advocate for trade policies that protect workers and promote fair competition.
“Tariffs have led to higher costs for consumers and uncertainty for workers. A comprehensive trade agreement that includes enforceable labor standards is essential,” says Richard Trumka Jr., President of the AFL-CIO.
Conservative / Right-Leaning Perspectives
Conservative voices have largely supported the use of tariffs as a tool to address trade imbalances and protect national interests. They view the temporary reduction as a strategic move to bring China to the negotiating table.
“The tariff reductions are a tactical decision to facilitate negotiations, but the U.S. must remain firm in demanding structural changes from China,” states Senator Marco Rubio (R-FL).
Think tanks such as the Heritage Foundation have echoed this sentiment, emphasizing the need for a strong stance against unfair trade practices.
“China’s state-led economic model poses a threat to free markets. The U.S. must leverage its economic power to ensure fair competition,” argues James Carafano, Vice President of the Heritage Foundation.
Comparable or Historical Cases
Historical analogs to the 2025 U.S.-China tariff reduction can help contextualize both its significance and potential outcomes. One of the most instructive comparisons is the U.S.-Japan trade conflict of the 1980s. During that period, the U.S. grappled with a soaring trade deficit and widespread concern over the competitiveness of American manufacturing sectors—particularly automobiles and electronics. In response, the Reagan administration implemented a series of aggressive trade measures, including voluntary export restraints (VERs), tariffs, and bilateral trade agreements. Japan ultimately agreed to restrict exports of automobiles and increase imports of U.S. goods, a move which helped temporarily reduce tensions but also laid the groundwork for structural adjustments in both economies.
Another critical historical case is the Smoot-Hawley Tariff Act of 1930, which raised tariffs on over 20,000 imported goods. Enacted in the wake of the Great Depression, the law intended to protect U.S. farmers and manufacturers but instead triggered an international trade war. Retaliatory tariffs by other nations led to a steep decline in global trade volume—by as much as 66%—and are widely considered to have worsened and prolonged the economic crisis. The lesson from Smoot-Hawley is clear: protectionist overreach can have global consequences, especially in a tightly interconnected economic system.
The China-U.S. trade dispute of 2018–2019 under President Donald Trump is another essential precedent. Then, tariffs were used not only to address trade imbalances but also to pressure China into structural economic reforms, such as improving intellectual property protections and ending forced technology transfers. The resulting “Phase One” trade deal in January 2020 provided some short-term gains but failed to produce lasting systemic changes. Moreover, tariffs remained in place on hundreds of billions of dollars’ worth of goods, suggesting limited success in achieving long-term goals through economic coercion.
“History teaches us that while tariffs can serve as a short-term negotiating tool, their long-term use can create economic distortions and diplomatic friction,” notes Dr. Meredith Crowley, international trade economist at the University of Cambridge.
Each of these cases reveals that while tactical trade interventions may yield temporary concessions or buy time for negotiations, they often come at the cost of market instability and strained alliances. The 2025 tariff reduction appears similarly transitional—a strategic pause rather than a final peace.
Policy Implications and Forecasting
The 90-day U.S.-China tariff reduction agreement, while welcomed by markets and observers, remains fraught with both opportunity and risk. In the short term, the move is likely to have several positive effects: calming investor anxieties, relieving inflationary pressures, and restoring confidence in global supply chains that have been buffeted by years of uncertainty. Sectors like technology, agriculture, and manufacturing may experience an uptick in activity as tariff burdens temporarily ease and trade flows resume at more sustainable volumes.
However, the long-term policy implications are far less certain. Central to the current dispute are unresolved structural issues—chief among them China’s state-subsidized industries, intellectual property practices, and restrictions on foreign business operations. Unless substantive reforms are achieved through follow-up negotiations, the tariff suspension could simply delay another cycle of retaliatory actions. This raises the risk of further destabilizing an already fragile global trade regime.
On the U.S. side, reliance on executive authority to implement major trade decisions, rather than through congressional oversight or multilateral institutions like the WTO, invites criticism. It places too much discretion in the hands of the executive branch and sidelines broader institutional debate. “The overuse of unilateral tariffs risks eroding America’s credibility in global economic governance,” warns Dr. Chad P. Bown, senior fellow at the Peterson Institute for International Economics.
Moreover, policy experts are concerned that temporary measures without legislative backing may not lead to enforceable or sustainable outcomes. China, for its part, may use the pause to reposition its trade strategies, diversify partners, or wait out the U.S. election cycle in the hopes of negotiating with a different administration.
From an international perspective, the deal may provide breathing space to reinforce global supply chain resilience and prompt reconsideration of how multilateral trade norms can be revitalized. Institutions like the WTO could regain relevance if they are used as forums for structured dialogue rather than being sidelined.
Think tanks such as the Council on Foreign Relations and Brookings Institution argue for embedding such agreements in broader diplomatic strategies. “Economic deals cannot succeed in isolation; they must be linked to strategic goals like climate policy, cybersecurity, and global health,” says Dr. Mireya Solís of Brookings.
Ultimately, the agreement’s durability will depend on both governments’ political will and their ability to reconcile national interests with global economic integration.
Conclusion
The recent U.S.-China tariff reduction is emblematic of a broader struggle to reconcile national economic sovereignty with the demands of an interdependent global marketplace. While the 90-day truce provides a welcome pause from escalating tensions, it is far from a resolution. The legal and policy questions it raises—particularly around executive power, international trade norms, and the efficacy of unilateral economic tools—remain unresolved.
On one hand, the agreement demonstrates the potential for diplomacy to avert further economic harm. By rolling back some of the most punishing tariffs, both nations have signaled a willingness to negotiate rather than escalate. On the other, the absence of a binding treaty or institutional framework suggests that this détente may prove ephemeral, subject to the same strategic uncertainties that have characterized U.S.-China relations for the past decade.
From a legal standpoint, the executive’s expansive trade authority under statutes like the Trade Act of 1974 and IEEPA invites scrutiny. While courts have generally upheld such powers, the lack of congressional involvement in a matter with significant economic implications raises legitimate concerns about accountability and oversight. Meanwhile, China’s ability to adjust state policies in response to international pressure remains limited by the structure of its political economy.
Public sentiment in both countries is also divided. U.S. businesses, particularly in sectors like agriculture and semiconductors, see the agreement as a rare win. But labor groups and environmental advocates worry that economic benefits will again be prioritized over fair labor practices or sustainable development. In China, the reduction may be viewed as a concession made under duress, potentially limiting domestic support for deeper structural changes.
As former U.S. Trade Representative Charlene Barshefsky aptly summarizes, “Tariff truces are inherently unstable unless underpinned by enforceable agreements and mutual trust.”
The central tension persists: Can the world’s two largest economies cooperate within a rules-based international system, or will strategic competition dominate their relationship? Future developments—such as the outcome of the next U.S. election, China’s economic reforms, or WTO adjudications—may decisively shape this dynamic.
Policymakers and legal scholars must now confront a crucial question: What institutional and legal reforms are necessary to ensure that trade policy balances national security, economic growth, and international cooperation in a sustainable and democratic way? The answer may determine not just the trajectory of U.S.-China relations, but the future architecture of global trade itself.
For Further Reading:
- “US and China agree to slash tariffs temporarily after trade talks” – The Jakarta Post: https://www.thejakartapost.com/business/2025/05/13/us-china-agree-to-slash-tariffs-as-trump-says-will-speak-to-xi.htmlNew York Post
- “An uneasy US-China détente on tariffs” – Financial Times: https://www.ft.com/content/f72b7f2f-ef27-49f0-958b-37413dca8641Financial Times
- “Markets rise as US and China agree to slash tariffs” – BBC News: https://www.bbc.com/news/articles/czx0ry7kdk5oBBC
- “Trump tariffs live updates: US cuts ‘de minimis’ tariff as China lifts Boeing ban” – Yahoo Finance: https://finance.yahoo.com/news/live/trump-tariffs-live-updates-us-cuts-de-minimis-tariff-as-china-lifts-boeing-ban-191201942.htmlYahoo Finance+1Yahoo Finance+1
- “China cautiously welcomes pause in US tariff war” – The Guardian: https://www.theguardian.com/world/2025/may/13/china-cautiously-welcomes-p