Trump tariff war sent trade into freefall

President Donald Trump met Chinese President Xi Jinping in Beijing on May 13 as both governments tried to stabilize a trading relationship that shrank sharply after the tariff escalation of 2025. Associated Press reported that the latest round of tariffs and countermeasures sent U.S.-China commerce into a steep decline and forced companies on both sides to rework sourcing, production and sales plans. (pbs.org) The White House and China said in a joint statement issued after talks in Geneva in May 2025 that both sides would suspend part of the new duties for 90 days and set up a mechanism for further discussions. ### How far did trade fall after the tariff campaign? In 2016, China accounted for more than 13% of total U.S. trade with the world, according to Associated Press. (whitehouse.gov) By 2025, that share had fallen to 6.4%, with Mexico and Canada overtaking China as the top two U.S. trading partners. Chad Bown of the Peterson Institute for International Economics said the average U.S. tariff on Chinese imports stood at 3.1% before the first Trump tariffs in 2018 and remains close to 48% even after retreating from triple-digit levels reached last year. Bown wrote separately that Trump’s second trade war raised tariffs on China by 145 percentage points by April 2025, accelerating the drop in imports from China. (pbs.org) ### What did the tariffs do to companies on both sides? Many U.S. companies shifted production from China to Vietnam and India, according to the AP account published by PBS. Chinese exporters, facing weaker U.S. demand and higher barriers, sought replacement customers in Europe and Southeast Asia. (pbs.org) Michael Lu, founder and chief executive of gift-box maker Brothersbox in Dongguan, told AP that “the U.S. used to be a more stable market.” Wilbur Ross, Trump’s former commerce secretary, said the idea that either economy could become fully independent of the other was “a fiction.” Those comments captured the practical problem facing manufacturers and traders after a year of disrupted orders and shifting supply chains. (pbs.org) ### Why are Washington and Beijing talking about limited reopening instead of a full reset? The May 12, 2025 joint statement said both governments would suspend 24 percentage points of certain added duties for an initial 90-day period while keeping a 10% additional tariff in place on covered goods. (pbs.org) The statement also said China would suspend or remove non-tariff countermeasures taken against the United States since April 2, 2025. Reuters reported on May 13 that officials were weighing a managed-trade approach for non-sensitive goods, with each side potentially identifying about $30 billion of imports for tariff reductions. Reuters also reported that U.S. officials had floated a “Board of Trade” idea as part of that narrower reopening effort. (pbs.org) ### Which industries are watching the summit most closely? American farmers are watching soybean sales because China had shut out U.S. soybeans for much of 2025, according to AP. The same report said U.S. manufacturers are also focused on access to Chinese rare earth minerals used in products ranging from smartphones to fighter jets. (whitehouse.gov) AP reported that China could announce purchases of U.S. soybeans, beef and Boeing aircraft as part of the current talks. CNBC reported on May 14 that the summit was framed by both sides as an effort to stabilize fractured ties rather than deliver a broad settlement. (usnews.com) ### What happens after the Beijing meeting? The White House statement from the Geneva talks named Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer as the U.S. leads for continued discussions, with Chinese Vice Premier He Lifeng leading for Beijing. The statement said those talks may be held alternately in China and the United States, or in a third country by agreement. (pbs.org) May 14 was the date by which both governments said they would begin carrying out the Geneva tariff changes, and any extension or replacement of the truce is expected to emerge from the Bessent-Greer-He mechanism set out in that statement. (whitehouse.gov) (pbs.org)