China-US Trade De-escalation: New Opportunities for Market and Business

Recently, China and United States released a "Joint Statement on Economic and Trade Talks" in Geneva, Switzerland, announcing the suspension of some tariff hikes and the establishment of a normalized consultation mechanism. phased agreement marks a shift from a "tariff war" to a "dialogue window" between the world's two largest economies, injecting certainty into the global environment, while also highlighting the long-term nature of deep-seated structural contradictions.

According to the statement, the US canceled 91% of the tariffs previously and suspended 24% of the "reciprocal tariffs" for 90 days, retaining a 10% basic rate; China simultaneously canceled retaliatory tariffs suspended non-tariff measures. This adjustment directly reduces the trade costs for Chinese and US companies. Taking the main export industries such as electromechanical, textiles, and furniture the United States as an example, the export cost reduction exceeds 20%. Data show that the cargo volume of ports on the US West Coast decreased by 67%-on-year during the tariff war, while China's exports to the US in the first quarter decreased by 17.6% quarter-on-quarter. After tariff de-escalation, US importers have resumed purchasing Chinese manufactured goods, and Chinese manufacturing enterprises have been able to relieve the pressure of supply chain relocation. For example, import tariff of ethane in the chemical industry has been reduced from 2% to 1%, and companies such as Satellite Chemical save more than 100 million y in annual costs, promoting the optimization of ethylene raw material structure.

The economic and trade consultation mechanism established by both sides has become the core highlight of the agreement. This mechanism jointly led by key economic decision-makers from China and the US, with flexible meeting locations and working-level consultations that can be held as needed. This institutionalized design goes temporary meetings and provides a management framework for long-term and complex trade frictions. However, the statement did not touch on core disagreements such as market access and technology transfer, the US still retains a tough "America First" stance. For example, although the US temporarily exempts tariffs on finished pharmaceuticals, the imposition of tariffs on raw materials may up the cost of generic drugs, forcing Chinese pharmaceutical companies to accelerate their overseas layout. This "partially coupled, partially decoupled" dual structure foreshadows that the competition China and the US in the high-tech field will become more covert in the future.

Although tariff de-escalation has eased short-term pressures, the game "de-risking" and "re-coupling" in the global industrial chain continues. The US is pushing for the transfer of manufacturing to Mexico and India through the "C Act", while China is accelerating the layout of backup capacity in the "China Region". For example, China's trade volume with ASEAN in the first quarter by 20.8% year-on-year, offsetting the risk of a decline in exports to the US. In addition, the Regional Comprehensive Economic Partnership (CEP) rules of origin reduce tariff costs and attract companies to extend their supply chains to Southeast Asia. The global industrial chain is showing a tripartite pattern of "North American Trade Area RCEP EU", and the easing of China-US trade relations may prompt companies to reassess the resilience of their supply chains

For multinationals, the 90-day window presents both opportunities and challenges. Manufacturing companies can optimize their supply chains by advantage of the tariff reduction window, such as locking in raw material prices and applying for government-specific subsidies to enhance competitiveness. In the agricultural sector, Chinese soybean processors are turning deep processed products to boost added value and reduce reliance on primary agricultural products. However, the risk of long-term decoupling remains, with the US "friend-shoring" still driving the relocation of manufacturing and the import restrictions on high-end manufacturing equipment proving difficult to lift. Companies need to simultaneously advance their market diversification strategy, explore the markets RCEP member countries, and accelerate technological upgrading to cope with potential technology blockades.

The agreement reached this time confirms the high complementarity of the Chinese and US economies. shows that the China-US economic and trade relationship supports about 2.6 million jobs in the United States and saves US households more than $1,000 per year However, it is difficult to fundamentally ease the strategic competition between the two sides in the fields of technology and finance. For example, the US has not relaxed its export control of semiconductor to China, while China is accelerating breakthroughs in industrial software, CNC machine tools, and other fields through domestic substitution. In the future, China-US relations will exhibit the of "normalization of competition and cooperation," with potential local easing in the trade field, but the game in the fields of technology and finance will continue.

The easing China-US economic and trade relations brings short-term stability to the global business environment, but long-term structural contradictions still need to be gradually resolved through institutionalized dialogue. need to find opportunities in the balance between "de-risking" and "re-coupling," and the reconstruction of the global business ecology depends on whether China and the US find a new balance point in competition and cooperation. As said by the vice president of the Chinese Statistical Association, "There are no winners in confrontation, and only cooperation can lead to-win outcomes." This principle is not only the cornerstone of China-US economic and trade relations but is also key to breaking the ice and restructuring the global business landscape