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“Wait. What just happened?“

• Tariffs on Chinese imports will be reduced from 145% to 30% following negotiations in Switzerland.
• China will reduce tariffs on US goods to 10%.
• This is a temporary pause for 90 days, set to take effect on/by Wednesday (5/14/25)
• This pause is separate from April’s 90 day pause for countries not named China.

“That’s good, isn’t it? Will prices still go up?”

• The original Liberation Day reciprocal tariffs on Chinese imports were 34%.
• They are now 30%.
• The de minimis exemption for Made in China goods is still dead, and“more than 80% of total US e-commerce shipments in 2022 were de minimis imports, the vast majority of which come from China.” – CNN

“Will there still be empty shelves?”

• Incoming shipments on the west coast dropped significantly over the last month. The very first ships carrying goods subject to the 124% tariff landed just last week.
• Big companies were able to rush to stock up, so they might be able to manage.
• For smaller businesses, the supply shock & tariff spike could be disastrous as they’re less able to manage the cash flow disruption.

“Anything else?”

• Today’s news is “just” about China. The rest of the world remains at 10%, with the large Liberation Day reciprocal tariffs set to be reimposed in early July.
• There’s an obscure federal court which could potentially halt the tariffs altogether. They start hearing arguments this week.
• Planet Money did a great podcast on just what “Made in China” actually means:

(Very top image: by Maksym Tymchyk on Unsplash)