China Signals Game-Changer: How Lower US Tariffs Could Ignite Unstoppable Trade Booms—Are You Ready to Profit?
Who would’ve thought a US Supreme Court decision could shuffle the trade deck so dramatically? China, often in the crosshairs of tariffs and trade tensions, now finds itself cruising with lower tariff rates after the scrapping of IEEPA-based reciprocal and fentanyl tariffs. Imagine tariffs dropping from a hefty 30% to a modest 15%—that’s like switching from a heavy winter coat to a light jacket just in time for spring. But here’s the kicker: while the trade barriers soften, the larger game of strategic patience—especially around tech chokepoints—still holds both nations in a careful dance. Is this the calm before a blazing new era of US–China trade, or just a clever pause? Buckle up as we unpack the implications for global markets and those savvy enough to spot opportunities amid shifting trade winds. LEARN MORE
ABN AMRO economists Rogier Quaedvlieg, Arjen van Dijkhuizen and Bill Diviney note that China is a key beneficiary of the US Supreme Court ruling, as IEEPA-based reciprocal and fentanyl tariffs are scrapped and likely replaced by a lower 15% Section 122 rate. He expects some restoration of US–China trade flows, while both sides still have incentives to maintain the broader trade truce, including on technology chokepoints.
Beijing gains but truce still holds
“At first glance, China looks to be one of the beneficiaries of the Supreme Court Ruling, as the two grounds that the US used last year to install tariffs on China (the ‘global reciprocal’ one and a fentanyl-related one) under IEEPA are now gone.”
“Before the Supreme Court Ruling, US nominal tariffs on China under the 2nd Trump administration amounted to 30% (20% reciprocal, and the fentanyl-related part reduced from 20% to 10%), with consumer electronics being exempted.”
“Should the US now install 15% tariffs on China under Section 122 of the 1974 Trade Act, that would leave China facing lower nominal tariffs (assuming exemptions for consumer electronics remain).”
“That could help restore to some extent direct bilateral trade flows between the US and China (in itself a positive for growth), with Chinese exports to the US down by 20% in 2025 compared to 2024.”
“Nevertheless, we still are of the view that both the US and China will have their own reasons to keep the trade truce in place. A very important part of that truce does not relate to tariffs, but to chokepoints – with both countries agreeing last October to postpone tighter restrictions on semiconductors (US) and rare earth exports (China) by one year.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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