A fragile truce

The 90-day pause lowers some duties, but fundamental tensions remain unresolved

Welcome back to What’s Happening in China, your weekly China brief.

In an unexpected move, the U.S. and PRC on Monday announced a 90-day pause on reciprocal tariffs, bringing the recent U.S. tariff rate on most PRC imports down to 30%. With this adjustment, total U.S. tariffs on China will range between 40% and 70%, while Chinese tariffs on U.S. exports will drop to 10%.

Additionally, the U.S. agreed to slash “de minimis” tariffs—exemptions from duties on small, low-value parcels shipped directly to consumers—while Beijing paused export restrictions on dual-use items for 28 American companies. In a joint statement, the two countries said they “will establish a mechanism to continue discussions about economic and trade relations.”

Commenting on Trump’s 20% fentanyl-related tariffs, Foreign Ministry spokesperson Lin Jian said: “China has made it clear more than once that fentanyl is the U.S.’s problem, not China’s. It’s the U.S.’s responsibility to solve the issue. Despite the goodwill China has shown, the U.S. wrongly slapped tariffs on Chinese imports by citing the issue of fentanyl.” He added: “If the U.S. truly wants to cooperate with China, it should stop vilifying and shifting the blame on China.”

Also this week in Beijing, speaking at the opening ceremony of the summit between the Community of Latin American and Caribbean States (CELAC) and China, in comments widely interpreted as targeting U.S. trade policies, Xi said: “There are no winners in tariff wars or trade wars. Bullying and hegemony will only lead to self-isolation.”

The truce, which went into effect Wednesday, offers no guarantee of a lasting ceasefire, and uncertainty looms over negotiations between now and August.

Ryan Hass, director of the John L. Thornton China Center at Brookings, reflecting on the trade talks in Geneva, cautioned: “Nobody should celebrate too soon. None of the underlying US-China issues have been resolved.”

According to Politico, Bessent and Vice Premier He Lifeng are scheduled to meet again in June.

Let’s jump into it.

— PC

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Through the Lens

Qinghai Lake, China’s largest, in Qinghai Province.

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In Focus

I. Let’s hit pause with a tariff break

The United States and China have agreed to slash punitive tariffs against each other in a major deescalation of Donald Trump’s trade war that sent stock markets sharply higher on Monday.

The U.S. will cut Trump’s recent tariffs on Chinese imports from 145 percent to 30 percent, while the Chinese side will drop measures from 125 percent to 10 percent. The suspension is temporary for now, lasting 90 days, allowing time for further negotiations.

“Neither side was interested in a decoupling,” U.S. Treasury Secretary Scott Bessent said at a press conference in Geneva after leading two days of talks at the weekend with Chinese Vice Premier He Lifeng.

Read: US and China slash tariffs as trade war cools (Politico)

Related:

• Donald Trump says he’s willing to travel to China to meet Xi Jinping (The Straits Times)

• China sees U.S. trade deal as win for Beijing (CNBC)

• To survive the trade war, China aims to create a stronger domestic economy (SCMP)

• US-China trade war pushed supply chain to breaking point, data shows (CNBC)

• China Removes Ban on Boeing Deliveries After US Trade Truce (Bloomberg)

• China issues warning to UK over terms of US trade deal (The Guardian)

• China-US 90-day tariff truce should be extended, Global Times says (The Straits Times)

• Understanding the Temporary De-Escalation of the U.S.-China Trade War (Center for Strategic and International Studies)

• The US and China have reached a temporary truce in the trade wars, but more turbulence lies ahead (The Conversation)

• Trump and Xi Are Both Selling Pain. Their People Aren’t Buying (World Politics Review)

II. Soy loco por ti, America

China extended a credit line of $9.2 billion (€8.3 billion) to Latin American and Caribbean countries at a summit in Beijing on Tuesday, with one catch — the credit would be in the Chinese yuan currency.

The move, which excludes the global reserve currencies like the US dollar, is meant to push Chinese currency domination at a time the Asian superpower has been deepening its strategic ties in Latin America.

"Although China lies far from the Latin American and Caribbean region, the two sides have a time-honored history of friendly exchanges," Chinese President Xi Jinping told the opening ceremony of the China-CELAC Forum.

Leaders such as Brazilian President Luiz Inacio Lula da Silva, Chilean President Gabriel Boric and Colombian President Gustavo Petro were among those in attendance.

Read: China deepens ties with Latin America during Beijing forum (DW)

Related:

• China Makes Overtures to Allies in America's Backyard (Newsweek)

• Colombia joins Belt and Road initiative as China courts LatAm (HKFP)

• China allows visa-free entry for 5 Latin American nations to boost ties (AP)

• Four questions (and expert answers) about the China-Latin America summit (Atlantic Council)

III. “It’s OK to be Chinese overseas.”

Chinese companies have long hired Westerners to project an international image — sometimes as executives, other times as paid actors for events — a practice so widespread it is known as the rent-a-foreigner industry. That strategy has since evolved.

Even a year or two ago, conversations with Chinese clients always began with “How do we eliminate the Chinese aspect of our image?” Chris Pereira, Singapore-based chief executive of iMpact, a communications firm advising Chinese companies expanding abroad, told Rest of World.

Now, Pereira said, more clients are asking how to tailor their products and services for overseas markets. “It is not to hide their identity, it is to localize their operations,” he said.

“DeepSeek and [other] successful Chinese companies overseas right now are giving the people coming in the wave behind them more confidence to just be themselves — it’s OK to be Chinese overseas.”

Read: DeepSeek’s success shifts how Chinese startups go global (Rest of World)