U.S. and China reach comprehensive economic and trade agreement lowering tariffs

FreightWaves Staff

Mon, May 12, 2025, 7:19 AM 3 min read

After weeks of uncertainty, the United States and China have formalized a new Economic and Trade Agreement aimed at addressing longstanding concerns and establishing clearer guidelines for commerce.

The agreement underscores the critical importance of the economic relationship between the world’s two largest economies. Both nations have explicitly acknowledged that expanded trade, sticking to international market norms, and market-based outcomes serve their mutual interests, and creates broader international cooperation in the freight and logistics sectors.

The preamble to the agreement specifically recognizes the benefits of contributing to “the harmonious development and expansion of world trade” while addressing existing trade and investment concerns identified by both parties.

A substantial portion of the agreement focuses on intellectual property protections, signaling a significant shift in China’s approach to this issue. China has acknowledged its ongoing transformation “from a major intellectual property consumer to a major intellectual property producer” and expressed belief that enhanced intellectual property enforcement aligns with its goals of building an innovative economy and promoting high-quality economic growth.

Under Article 1.1, both nations have formally affirmed their commitment to intellectual property provisions as outlined throughout the agreement, while Article 1.2 establishes that both parties “shall ensure fair, adequate, and effective protection and enforcement of intellectual property rights” and guarantee “fair and equitable market access” to entities relying on intellectual property protection.

The agreement includes a 90 day pause on most of the tariffs in place since April second to allow for “further negotiations” over the next three months. Both the US and China will roll back the reciprocal tariffs, with American tariffs on China sitting around 30 percent and duties on US goods around 10 percent. These lower rates will go into effect May 14th.

The agreement places particular emphasis on trade secret protection, which the United States has highlighted as a priority concern. China has positioned trade secret protection as “a core element of optimizing the business environment,” with both nations committing to effective protection for trade secrets and confidential business information.