• The US will retain a 10% baseline tariff on Chinese imports and a 20% punitive rate on fentanyl-related products.
  • The decision follows a 90-day tariff pause after high-level talks in Geneva, signaling cautious de-escalation.
  • Analysts warn of lingering economic risks, though J.P. Morgan upgraded China’s 2025 growth forecast to 4.8%.

Tariffs Hold Steady as Talks Continue

The Biden administration has opted to keep the 10% baseline tariff on most Chinese goods while enforcing a stricter 20% levy on fentanyl precursors, according to people familiar with the matter. The move comes after a temporary truce in the trade war, with both sides agreeing to a 90-day pause on further escalations following negotiations in Geneva last month.

Market reaction has been muted so far, though some analysts suggest the measured approach could ease pressure on the yuan (CNY), which has faced depreciation risks amid the prolonged trade dispute. J.P. Morgan recently revised its 2025 growth projection for China upward, citing moderated tariff policies as a stabilizing factor.

Fentanyl Tariffs Reflect Dual Priorities

The 20% duty on synthetic opioid-related imports underscores Washington’s dual focus on trade and public health. "This isn’t just about economics—it’s about saving lives," said one White House official, speaking on condition of anonymity. The policy aligns with broader efforts to curb the flow of illicit drugs, though critics argue tariffs alone may not solve the opioid crisis.

Meanwhile, US importers continue to grapple with higher costs, which could eventually trickle down to consumers. Some manufacturers have begun shifting supply chains, but full decoupling remains impractical for many industries.

What’s Next?

While the framework agreement has temporarily eased tensions, experts caution that a full normalization of trade relations is unlikely in the near term. Technology restrictions, rare earth export controls, and visa policies remain sticking points. "The 90-day pause is a Band-Aid, not a cure," said a trade policy analyst. "Both sides are still far apart on core issues like IP theft and state subsidies."

Correction: An earlier version misstated the duration of the tariff pause. It is 90 days, not 60.