China US

The White House issued an executive order on Monday to adjust tariffs on low-value imports from China beginning May 14, reversing previously planned rate hikes. Experts said the move reflects initial progress in China-US trade talks and rising pressure from inflationary costs in the US. They said the move marks a step back from earlier tariff escalation and provides renewed confidence to traders on both sides.

According to the presidential executive order titled "Modifying Reciprocal Tariff Rates to Reflect Discussions with the People's Republic of China," the White House will amend the Harmonized Tariff Schedule of the United States effective at 12:01 am EDT on May 14. The changes include reducing certain China-related duties from 120 percent to 54 percent and removing the $200 postal item duty provision originally set to take effect on June 1.

The adjustment applies to all goods imported into the US customs territory from the Chinese mainland, Hong Kong and Macao special administrative regions, for consumption or withdrawn from warehouse for consumption, according to the White House.
 
The adjustment reflects meaningful progress following the initial phase of China - US negotiations and should reasonably apply to low-value parcels as part of the broader agreement, He Weiwen, a senior fellow at the Center for China and Globalization, told the Global Times on Tuesday.

He noted that beyond the general trade considerations, the earlier approach of separately taxing small parcels was highly impractical. It introduced unnecessary operational complexity at the operational level, especially for customs clearance, and triggered public frustration. 

"For many American consumers, these parcels are an essential channel for accessing affordable and diverse goods. Restricting them created avoidable friction," he added.

Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday that the move sends an important signal— a step back from the previous round of tariff escalation.  

"The adjustment likely reflects mounting pressure from rising costs and supply chain disruptions in the US," he said, adding that the development offers a degree of confidence to those engaged in bilateral trade. However, he cautioned that optimism should remain measured, as tariff levels are still relatively high despite the reduction.

The adjustment brings clear benefits to Chinese exporters, particularly in the cross-border e-commerce sector, He said. 

A significant portion of China's exports to Washington move via small parcels, and platforms like DHgate and AliExpress serve tens of millions of global users, according to He.

"We're likely to see a sharp rebound once the pressure eases," He said. However, the 54 percent rate remains relatively high, whether it will be lowered further depends on the broader trajectory of bilateral negotiations over the next 90 days, He noted. 

This executive order comes shortly after China and the US released a joint statement on their high-level economic and trade meeting in Geneva on Monday. 
 
The statement announced several key agreements, most notably a significant reduction in tariffs on both sides, which already drew global attention and prompted an immediate and positive market response.

Global Times