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The US–China tariff agreement, reached on May 12, 2025, is being widely misreported online. Some social media posts claim both countries “slashed tariffs by 115%.” That’s not just misleading—it’s mathematically impossible.
What they actually did was reduce tariffs by 115 percentage points—a significant move, but very different from a 115% cut.
Takeaway: It’s a percentage point drop, not a 115% decrease. The confusion comes from misreading the math.
What the Agreement Includes
The US–China tariff agreement is a 90-day truce that lowers duties to ease tensions and give diplomacy a shot.
The new U.S. tariff includes:
- A 10% base on all imports
- An added 20% on Chinese goods linked to fentanyl-related concerns
China’s reduction is broader, dropping from 125% to 10% across the board.
Takeaway: Both sides made major concessions, but tariffs aren’t gone—just lower for now.
Why This Matters
The 90-day pause gives negotiators space to work through deeper issues—like the U.S. trade deficit, China’s mineral export controls, and fentanyl-linked trade barriers.
A joint consultation group will meet regularly to manage disputes and monitor enforcement.
Takeaway: This isn’t a final deal. It’s a cooling-off period to see if bigger problems can be solved.
Economic Impact So Far
The US–China tariff agreement gave global markets a jolt:
- U.S. stocks and the dollar rose
- Gold prices dropped
- Analysts say recession fears may ease—for now
Investors welcomed the clarity and hope that a more permanent resolution is on the horizon.
Takeaway: Markets liked the short-term relief—but uncertainty still looms beyond the 90 days.
Keep Perspective
A 30% tariff is still hefty. If no broader deal is reached by mid-August, higher rates could return. And while the current cut is significant, long-term trade peace remains uncertain.
Still, the US–China tariff agreement marks real progress in a tense relationship that’s dominated global headlines.
Takeaway: Temporary relief is in place—but the real test is what comes next.
