US temporarily lowers tariffs on Chinese shipments to 30 percent

US and Chinese officials met over the weekend to talk trade and so far the result is that the US has agreed to temporarily lower tariffs on most items shipped from China to the US, while China has also agreed to lower tariffs and allow shipments of rare earth metals for the time being.

For the next 90 days, the highest tariffs on Chinese shipments will fall from 145 percent to 30 percent, while China will lower tariffs on US shipments to 10 percent. What that means in the long term remains to be seen though.

Last week Adafruit revealed $36K in tariffs had been applied to a recent shipment, which could lead to price increases for customers

After the higher tariffs took effect earlier this month, along with the elimination of the de minimis exemption on shipments valued at under $800, Chinese retailers including Shein, Temu, and AliExpress suspended direct-from-China shipments to customers in the US. Some customers who had recently purchased products that shipped from China were left in a weird limbo – with their packages held by carriers looking to collect fees that nearly tripled the cost of the items. And companies that rely on inexpensive shipments of Chinese goods were facing a near-existential crisis.

While the temporary de-escalation of the trade war appears to have left investors optimistic, the stock market isn't exactly a crystal ball. It's probably good news for folks looking to make long-term business plans that the tit-for-tat tariffs and other restrictions imposed by the US and China in recent months are largely on pause, there's no getting around the fact that it's still more expensive to ship stuff from China than it was a few months ago and it's unclear whether that will change (or what direction it will change in) over the coming months.

And it looks like the 90 day pause may not apply to the de minimis exemption, which means that direct China-to-US-customer shipments could still be a hassle, so I expect that Shein, Temu, and AliExpress will continue to try to primarily market items to US customers that are available from US warehouses for the foreseeable future.

The ups and downs over the past few months could also have a long-term impact even if the US and China do agree to terms that will keep tariffs low moving forward. For example, most of the world's rare earth metals and magnets come form China, and when the country restricted shipments of those materials to the US, it made it clear just how reliant US-based companies have been on China. It's likely that the US government and US-based companies will try to secure alternative sources for those materials in order to hedge their bets against future disruptions.

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