China offers partial tariff relief, but keeps 10% levy on US goods

China has officially confirmed it will suspend some of the punitive tariffs it imposed on US goods, a move that formalises the fragile trade truce reached last week between President Xi Jinping and US President Donald Trump.

However, the tariff relief is only partial. Crucially, a significant levy on US soybeans remains in place, a sticking point that is likely to prevent a full-scale resumption of the once-lucrative agricultural trade between the two economic superpowers.

Which tariffs are being cut?

On Wednesday, China’s State Council announced it will suspend the 24% additional tariff on US goods for one year.

However, it will maintain a separate 10% levy that was also introduced in response to President Trump’s ‘Liberation Day’ duties.

The commission also confirmed it would remove duties of up to 15% on certain other US agricultural goods starting November 10.

The moves follow a period of intense, tit-for-tat actions that have disrupted global supply chains and roiled financial markets.

The soybean sticking point: a 13% barrier remains

Despite the rollback on some agricultural products, the core issue for American farmers remains unresolved.

Chinese buyers of US soybeans will still face a total tariff of 13%, which includes a preexisting 3% base tariff.

According to traders, this remaining levy is high enough to make US shipments uncompetitive compared to alternatives from Brazil.

As a result, commercial buyers in China are unlikely to return to the US market in significant numbers.

“We don’t expect any demand from China to return to US market with this change,” Reuters quoted one trader at an international trading company.

Brazil is cheaper than US and even non-Chinese buyers are taking Brazilian cargoes.

A shadow of a once-mighty trade

The continued impasse over soybeans highlights the deep disruption caused by the trade war. Before 2017, soybeans were the top US export to China, with sales reaching $13.8 billion in 2016.

This year, however, China has largely shunned American crops, costing US farmers billions in lost exports.

Customs data shows that in 2024, China sourced roughly 20% of its soybeans from the United States, a dramatic drop from 41% in 2016, as buyers shifted their purchases to South America.

While a state-owned Chinese firm did make a small “goodwill” purchase just before the summit, market participants remain skeptical that trade will return to normal anytime soon.

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