US and China Announce Coordinated Tariff Cuts in Bid to Ease Trade Tensions

In a significant shift in trade policy, former President Donald Trump signed two executive orders on 4 November 2025, Eastern Standard Time, altering key tariff rates on Chinese goods. The move was swiftly reciprocated by China the following day, signalling a potential de-escalation in bilateral trade tensions.

Executive Order Reducing 'Fentanyl Tariffs'

Executive Order Text: The United States undertakes to reduce the ad valorem tariff rate applicable under the amended Executive Order 14195 from 20% to 10%, effective from 00:01 Eastern Time on 10 November 2025 for goods entering the consumer market or being released from bonded warehouses for consumption.

That is, the fentanyl tariff rate is reduced from 20% to 10%. It should be noted that the effective date of 10 November refers to the date goods arrive in the United States. The fentanyl tariff applies to all Chinese goods exported to the United States, meaning the tariff rate for all such goods will be reduced by 10%.

Extension of the 'Reciprocal Tariff' Truce Period

Executive Order text: The implementation of the revised Executive Order 14257 imposing increased 24% ad valorem tariffs on China and imposing 10% ad valorem tariffs on Chinese goods is suspended until 00:01 Eastern Standard Time on 10 November 2026.

This extends the truce period reducing the reciprocal tariff rate from 34% to 10% by one year, maintaining the 10% reciprocal tariff for a further twelve months. China currently faces one of the lowest reciprocal tariff rates among affected nations.

China's Reciprocal Announcement

On 5 November, the Customs Tariff Commission of the State Council of China issued an announcement regarding adjustments to the tariff measures imposed on imports originating from the United States, as detailed below:

To implement the outcomes agreed upon in the China-US economic and trade consultations, and in accordance with the Customs Tariff Law of the People's Republic of China, the Customs Law of the People's Republic of China, the Foreign Trade Law of the People's Republic of China, and other relevant laws and regulations, as well as fundamental principles of international law, the State Council has approved the following: the tariff measures stipulated in the Announcement of the Customs Tariff Commission of the State Council on the Imposition of Additional Tariffs on Imported Goods Originating in the United States (Announcement No. 4 of 2025) shall be adjusted. The 24% additional tariff rate on US imports shall remain suspended for one year, while the 10% additional tariff rate on US imports shall be retained.