Marking a de-escalation of ongoing trade tensions, the US and China have now agreed to temporarily reduce the tariffs imposed earlier this year. The decision, reached during high-level negotiations in Geneva over the weekend, reduces tariffs for 90 days starting May 14. The US will lower its tariffs on Chinese imports from 145% to 30%, while China will cut its retaliatory duties on US goods from 125% to 10%. The reductions mark a mutual 115% rollback in duties, something that is expected to bring temporary relief to industries hit hardest by the trade war, particularly in tech and electronics.
This marks a major diplomatic breakthrough since the new wave of tariffs came into effect in April, which had sharply escalated the trade standoff between the world’s two largest economies. “I’m happy to report that we made substantial progress between the United States and China in the very important trade talks. First, I want to thank our Swiss host. The Swiss government has been very kind in providing us this wonderful venue, and I think that led to a great deal of productivity we’ve seen. We will be giving details tomorrow, but I can tell you that the talks were productive. We had the vice premier, two vice ministers, who were integrally involved, Ambassador Jamieson, and myself. And I spoke to President Trump, as did Ambassador Jamieson, last night, and he is fully informed of what is going on. So, there will be a complete briefing tomorrow morning,” Scott Bessent, Secretary of the Treasury, commented on the matter.
So far, the economic fallout from the initial tariff escalation has been swift, and electronics prices have surged. One prominent example was the steep price hike of DJI’s Osmo Pocket 3 camera, which rose from $520 to $800 as tariffs made imported components more expensive. Futures for the Nasdaq and S&P 500 rose sharply following the announcement, with shares of both Chinese exporters and US tech giants rallying in early trading (Meta’s shares rose by 5.43%, Microsoft’s rose by 0.51%, AMD’s by 5.55%, and Nvidia’s by 3.89%, to name some).
For tech firms that are heavily dependent on the US-China supply chain, the temporary suspension offers short-term operational breathing room but does not eliminate underlying risks. Companies across the sector, ranging from semiconductor manufacturers to consumer electronics brands, have faced pricing volatility, supply chain disruptions, and growing uncertainty about market access in both countries. Some, like keyboard maker Das and retro gaming handheld manufacturer Anbernic, had already altered distribution strategies, either increasing prices or halting direct sales to consumers in the US.
Now, this new deal is likely to stabilize consumer prices for the time being, particularly for products like smartphones, computers, and peripheral devices that had been affected by the earlier rounds of tariff increases. However, not all goods are included in the rollback. Critical categories such as semiconductors, steel, and pharmaceuticals remain subject to sector-specific levies. US officials described this selective approach as part of a broader effort to address “strategic supply chain vulnerabilities.” As a result, major tech companies sourcing microchips or electronic components from Chinese suppliers may still be subject to elevated costs.
It should be noted that the current agreement does not reinstate the de minimis exception, which was revoked on May 2. The exemption had previously allowed goods valued under $800 to enter the US without duties, providing a loophole that many e-commerce platforms, including Temu and Shein, had leveraged to keep prices competitive. Without this provision, smaller consumer goods and accessories imported from China now incur additional fees, prompting platforms to rely more on US-based warehouses.
