U.S. and China Likely to Shelve New 100% Tariff, Treasury Secretary Reveals

October 26, 2025

Washington D.C. – The United States and China are on the verge of a important trade agreement, possibly averting a planned 100% tariff hike on Chinese goods. The development comes after intensive negotiations led by Treasury Secretary Scott Bessant with beijing’s chief trade representative.

Negotiations and Key Issues

According to sources familiar with the discussions, China has signaled its willingness to reach an accord following two days of intense talks. A preliminary “framework” is now in place for a potential meeting between President Donald Trump and Chinese President Xi Jinping, designed to prevent the imposition of heightened tariffs scheduled to take effect on November 1st. These tariffs were threatened in response to potential Chinese restrictions on rare earth minerals, vital components in numerous technologies.

Bessant indicated that a deferral of China’s proposed export controls on these critical minerals is anticipated. China currently dominates the global production and processing of rare earth minerals, creating a strategic concern for the United States and its industries. The U.S.views any disruption to the supply chain as a serious national security issue.

Leverage and Upcoming Meetings

The Treasury Secretary emphasized that President Trump’s threat of substantial tariffs provided significant negotiating leverage. This leverage facilitated a substantial foundation on which to build a broader trade understanding. Trump has already commenced an Asia tour, beginning with a summit in Malaysia, and is expected to meet with Xi Jinping in South Korea later this week.

Future Bilateral Discussions

Beyond the immediate tariff concerns, discussions are expected to extend to othre critical issues. Bessant revealed potential plans for President Trump to visit Beijing early next year, coinciding with the Lunar New Year on February 17th. A subsequent meeting in Washington is also anticipated before China hosts the Group of 20 summit next fall.

Fentanyl Crisis and Agricultural Trade

A key priority for President Trump during his anticipated meeting with Xi Jinping is the escalating fentanyl crisis in the United States. The U.S. goverment accuses China of insufficient efforts to curtail the flow of precursor chemicals used in the production of this deadly opioid. However, China maintains that the crisis stems from domestic demand within the U.S.

Secretary Bessant also expressed expectations of discussing increased purchases of American soybeans and other agricultural products by China, which coudl provide much-needed relief to American farmers.

Issue	U.S. Position	Chinese Position
Tariffs	Seeking to avoid 100% tariffs on Chinese goods.	Willing to negotiate to avoid tariffs.
rare Earth Minerals	Concerned about potential export controls.	Asserts right to manage natural resources.
Fentanyl	China must do more to curb precursor chemical flow.	U.S. demand drives the crisis.
Agricultural Purchases	Seeking increased purchases of U.S. products.	Open to discussion on trade balance.

Did You Know? Rare earth minerals are essential for manufacturing everything from smartphones and electric vehicles to military equipment.

pro Tip: Trade negotiations often involve complex compromises and can substantially impact global markets. Staying informed about these developments is crucial for investors and businesses.

Both China’s top trade negotiator, Li Chenggang, and Vice Premier He Lifeng affirmed reaching a preliminary consensus following discussions with the U.S. delegation in Malaysia, covering trade truce extensions, fentanyl, and export controls.

“I think we’re going to have a deal with China,” President Trump stated, signaling optimism about forthcoming meetings in both China and the United States.

What impact do you think a renewed trade agreement will have on the U.S. economy? How will this affect global supply chains?

Understanding the U.S.-China Trade Relationship

The economic relationship between the United States and China is one of the most significant in the world, characterized by extensive trade, investment, and complex geopolitical considerations. Over the past decades, this relationship has evolved from one of increasing interdependence to one marked by growing tensions over trade imbalances, intellectual property rights, and national security concerns. The current negotiations represent the latest chapter in this ongoing dynamic. According to the Office of the United States Trade Representative, China remains a vital trading partner despite ongoing challenges.

Frequently Asked Questions

• What are tariffs and how do they impact trade? Tariffs are taxes imposed on imported goods. They can increase the cost of goods, reduce trade volumes, and potentially led to retaliatory measures.
• Why are rare earth minerals crucial in the U.S.-China trade dispute? Rare earth minerals are critical for many high-tech industries, and china’s dominance in their production gives it significant leverage.
• What is the fentanyl crisis and how is it linked to China? The U.S. accuses China of not doing enough to prevent the export of chemicals used to manufacture fentanyl, a deadly opioid.
• What is the significance of the upcoming meeting between Trump and Xi Jinping? This meeting offers an possibility to address key trade issues and potentially de-escalate tensions between the two countries.
• How will a trade deal with China affect American farmers? Increased purchases of American agricultural products by China could provide a significant boost to the farming sector.
• What is the Association of Southeast Asian Nations (ASEAN)? ASEAN is a regional association that promotes economic, political, and security cooperation among its member states in Southeast Asia.
• What are the potential benefits of a trade truce between the U.S. and China? A trade truce can reduce uncertainty, boost economic growth, and foster greater stability in the global economy.

Share your thoughts on this developing story in the comments below!

How might the suspension of these tariffs affect U.S. companies currently diversifying their supply chains away from China?

De-escalation in Trade Tensions: A potential Shift

Recent statements from U.S. Treasury Secretary Janet Yellen indicate a likely shelving of proposed new 100% tariffs on Chinese goods. This development signals a potential de-escalation in the ongoing trade tensions between the world’s two largest economies. The announcement, made on October 25th, 2025, comes amidst ongoing high-level talks aimed at stabilizing the economic relationship. This move impacts U.S.-China trade relations, tariff policy, and global economic forecasts.

details of the Proposed Tariff and its Suspension

The proposed tariffs, initially considered as a response to concerns over China’s industrial policies and trade practices, were slated to impact a broad range of Chinese imports.These included key sectors like:

* Technology: Semiconductors, telecommunications equipment, and advanced manufacturing components.

* Consumer Goods: Apparel, footwear, and various household items.

* Industrial Materials: Steel, aluminum, and other essential raw materials.

Secretary Yellen’s comments suggest that these tariffs are now unlikely to be implemented, contingent on continued dialog and progress in addressing underlying concerns.The decision to pause the tariffs is being framed as a gesture of goodwill and a commitment to finding constructive solutions through negotiation,rather than escalating the trade war. This is a importent change from previous trade war strategies.

Reasons Behind the Shift in Policy

Several factors appear to have contributed to this policy shift:

* Inflation concerns: Imposing new tariffs would likely lead to higher prices for American consumers and businesses, exacerbating existing inflationary pressures. The Biden administration is prioritizing inflation control and views tariffs as counterproductive in this regard.

* Economic Slowdown: Both the U.S.and Chinese economies are facing headwinds, and a further escalation of trade tensions could worsen the slowdown. Avoiding a full-blown trade war is seen as crucial for maintaining global economic stability.

* Diplomatic Efforts: Ongoing diplomatic engagements between U.S. and Chinese officials have created a channel for communication and negotiation. These talks have reportedly yielded some progress in addressing key issues.

* Supply Chain Disruptions: Additional tariffs would further disrupt already strained global supply chains, impacting businesses and consumers alike.

Impact on Businesses and Industries

The potential shelving of the new tariffs is expected to have a positive impact on several industries:

* Retail: Retailers that rely on Chinese imports will avoid higher costs,potentially leading to lower prices for consumers.

* Manufacturing: Manufacturers that use Chinese components will benefit from stable input costs.

* Technology: The technology sector, heavily reliant on global supply chains, will avoid further disruptions.

* Agriculture: U.S. agricultural exporters, who have been negatively impacted by chinese retaliatory tariffs, could see increased access to the Chinese market. This impacts agricultural trade considerably.

However, some sectors that have benefited from protectionist measures may face increased competition. The impact on U.S. manufacturing will be closely watched.

China’s Response and Future Outlook

China has welcomed the U.S. decision to reconsider the new tariffs, viewing it as a positive step towards stabilizing the bilateral relationship.Though, Chinese officials have reiterated their concerns about existing U.S. tariffs and called for their removal.

Looking ahead, the future of U.S.-China trade relations remains uncertain. Key areas of contention include:

* Intellectual Property Theft: The U.S. continues to accuse China of widespread intellectual property theft.

* Market Access: U.S. companies face barriers to accessing the Chinese market in certain sectors.

* State Subsidies: The U.S. is concerned about China’s state subsidies to domestic industries.

* Taiwan: The status of taiwan remains a sensitive issue.

Continued dialogue and negotiation will be essential to address these issues and prevent a further escalation of trade tensions. The focus will likely shift towards establishing a more level playing field and promoting fair trade practices. Monitoring trade negotiations will be crucial.

Benefits of Avoiding Further Tariffs

avoiding further tariff escalation offers several key benefits:

* Reduced Inflation: Lower import costs can definitely help to curb inflation.

* Economic Growth: Stable trade relations can support economic growth in both countries.

* Supply Chain Resilience: Avoiding disruptions to supply chains can enhance resilience.

* Improved business Confidence: A more predictable trade environment can boost business confidence and investment.

* Strengthened Global Economy: Reduced trade tensions can contribute to a more stable and prosperous global economy.

Practical Tips for businesses

Businesses should proactively prepare for potential shifts in the U.S.-China trade landscape:

1. Diversify Supply Chains: Reduce reliance on single suppliers and explore alternative sourcing options.
2. Monitor Trade Developments: Stay informed about the latest trade negotiations and policy changes.
3. assess Tariff Exposure: Identify products that are subject to tariffs and assess the potential impact on costs.
4. Explore Export Opportunities: Consider expanding into new markets to reduce dependence on China.
5. Engage with Policymakers: Advocate for policies that promote fair trade and a stable