A Decade of U.S.–China Trade Relations: Tariffs and Trade Dynamics
Over the past ten years, U.S.–China trade relations have swung from deep interdependence to intense conflict and partial stabilization. A bilateral trade war erupted in 2018–2019, leading to hundreds of billions of dollars’ worth of tariffs on each side. This confrontation peaked with the Phase One agreement in early 2020, which paused further escalation and set purchase commitments for China. Since then, most tariffs remain in place, though some have been reduced or suspended. In the last 12 months, there have been notable shifts – including China’s recent suspension of additional tariffs (as high as 125% on certain U.S. goods) – reflecting cautious easing in specific areas.
This report provides a detailed overview of the past decade of U.S.–China trade relations, focusing on tariff implementations, removals, and suspensions. It highlights the affected product categories (especially agriculture, energy, and other “soft” commodities), examines the legacy of the trade war and Phase One deal, and analyzes the current status of tariffs and their economic and political impacts on U.S. exporters and Chinese consumers/industries.
The Trade War Years: 2018–2019
Initial Escalation and Retaliation
The U.S. began imposing broad tariffs on Chinese imports under Section 301 in 2018. China retaliated in kind, with both countries targeting billions in goods. U.S. exports like soybeans, pork, and ethanol faced steep tariffs—many stacked on top of China’s base import duties.
Impact on Commodities
By late 2019, virtually all U.S. exports to China were affected by retaliatory tariffs, with effective rates on some goods exceeding 70%. Soybeans, for example, saw exports drop sharply as Chinese buyers turned to Brazil. U.S. energy exports, including LNG and crude oil, were also impacted by Chinese tariffs.
The Phase One Agreement: 2020–2021
Key Commitments
In January 2020, the U.S. and China signed the Phase One deal. China agreed to boost imports of U.S. goods by $200 billion over 2017 levels and implemented structural reforms in areas like agriculture and intellectual property.
Tariff Relief and Trade Resumption
Although many tariffs remained in place, China suspended or reduced retaliatory tariffs on key goods like soybeans, pork, and energy products to meet its commitments. This led to a sharp rebound in U.S. exports to China in 2020 and 2021, with agricultural trade hitting new records.
2022–2023: Stalled Negotiations and Partial Stability
Tariffs Remain but Exemptions Expand
Despite the Phase One deal’s expiration, China extended exemptions on many retaliatory tariffs, especially for critical goods. U.S. agricultural and energy exports remained strong, buoyed by these exemptions. However, structural tariffs—especially U.S. Section 301 tariffs—remained largely unchanged.
Strategic Trade Shifts
China continued diversifying its suppliers, investing in South American and African commodity infrastructure. The U.S., in turn, focused on nearshoring and strengthening ties with alternative trading partners.
New Suspensions and Quiet Cooperation
China’s Suspension of Up to 125% in Tariffs
In mid-2024, China made a major policy shift by suspending punitive tariffs—some of which exceeded 100%—on a broad range of U.S. goods. This suspension marked a significant reversal from earlier trade war-era policies, as the Chinese government sought to stabilize domestic prices and maintain access to key imports. Among the most impacted sectors were agricultural commodities and energy products, where U.S. exporters regained cost-competitive access to Chinese buyers. Pork, beef, corn, cotton, and ethanol were among the primary agricultural beneficiaries, while U.S. liquefied natural gas (LNG) and crude oil also saw a pickup in activity due to the removal of retaliatory tariffs.
This shift was driven in part by China’s need to support its post-COVID economic recovery, reduce input inflation, and signal goodwill amid ongoing diplomatic engagement with Washington. It also reflected Beijing’s recognition that certain imports—particularly in food, energy, and high-value manufacturing—remain difficult or expensive to replace.
Expanded Exemptions on U.S. Goods
China also expanded its use of targeted tariff exemptions over the past year, quietly informing companies and industry groups of waivers without issuing public lists. These exemptions allowed critical U.S. goods to enter the Chinese market without the burden of retaliatory tariffs, keeping input costs in check for key sectors of China’s economy. While not fully transparent, several categories of exemptions were confirmed through trade data, government bulletins, and media reports:
- Ethane Imports: On April 24, 2025, China waived tariffs on U.S. ethane, which is vital for its petrochemical industry.
- Semiconductors: Certain U.S. semiconductor components saw tariffs rolled back to ease pressure on China’s tech manufacturing supply chains.
- Pharmaceuticals: Selected U.S. medical products were exempted from additional tariffs to maintain affordable access for hospitals and health providers.
- Aerospace: Some aerospace components and equipment, including maintenance parts for U.S.-made aircraft, received exemptions to support aviation reliability.
- Medical Equipment & Chemicals: As reported on April 25, 2025, China began considering broader suspensions of tariffs on U.S. medical devices and industrial chemicals, both as inflation mitigation and as a potential goodwill gesture ahead of bilateral talks.
These exemptions underscore a broader strategy: China is managing its trade relationship with the U.S. through targeted tariff relief while retaining the legal framework to reapply duties if tensions resurface. For U.S. exporters, these moves offer opportunity—but also uncertainty, as access remains contingent on Chinese policy discretion.
Sectoral Impact
Agriculture
- Soybeans: Exports rebounded as China waived the additional 25% tariff.
- Pork and Beef: Suspensions lowered effective rates, reviving shipments.
- Corn and Cotton: Returned as viable feed and fiber exports.
Energy
- LNG: Suspension of 25% retaliatory tariff allowed resumed shipments.
- Crude Oil: Waived 5% tariff helped restore flows to Chinese refiners.
Soft Commodities and Other Goods
Products like tree nuts, fruit, wood pulp, and ethanol saw renewed demand from China once additional tariffs were lifted or reduced.
Current Tariff Landscape
| Category | U.S. Tariff on Chinese Goods | China Tariff on U.S. Goods (Post-Suspension) |
|---|---|---|
| Soybeans | 0% | ~3% (base only) |
| Pork & Beef | 0% | ~12% (base only) |
| LNG & Crude Oil | 0% | 0–5% (suspended retaliatory tariffs) |
| Industrial Equipment | 25% | Up to 25% (some still active) |
| Consumer Electronics | 7.5% | 5–10% (limited impact) |
Conclusion and Outlook
Ten years ago, U.S.–China trade relations were defined by growth and growing pains – China had become the United States’ largest goods trading partner, even as disputes simmered. Over the last decade, and particularly since 2018, the relationship has been redefined by tariffs and managed trade.
Today, tariffs remain historically high on bilateral trade, yet a delicate equilibrium has emerged: both sides enforce their tariffs in some areas while tacitly relaxing them in others. China’s recent suspension of tariffs up to 125% on key U.S. goods exemplifies this pragmatic calibration.
Looking ahead, scenarios range from gradual de-escalation to potential re-escalation, depending on the political and economic climate. For now, most exporters and importers must navigate a patchwork of suspended tariffs, policy waivers, and diplomatic unknowns.
Trade between the world’s two largest economies is far from frictionless—but far from broken. The challenge now is whether short-term concessions can lead to long-term stability.
