90 Days to Talk Inside the US-China Tariff Pause: What has happened so far and what comes next?

The year began with President Donald Trump’s second term inauguration on January 20, 2025, setting the stage for a renewed hardline stance on trade. On February 1, the United States imposed a 10% tariff on all Chinese imports, citing national security concerns tied to trade deficits and the fentanyl crisis. China responded swiftly on February 4 with a 15% tariff on U.S. coal and liquefied natural gas, alongside a 10% duty on crude oil, agricultural machinery, and certain vehicle imports. In a further escalation, China placed American companies like PVH Corp. and Illumina on its Unreliable Entity List and launched an antitrust investigation into Google.The standoff deepened in March when Trump expressed disappointment for China’s non-action on the “illicit drug crisis.” On March 3, the U.S. raised tariffs by another 10 percentage points, pushing the total rate on Chinese goods to 20%. China responded the next day by imposing a 15% tariff on a range of U.S. agricultural products, including wheat, corn, cotton, and poultry, effective March 10.April marked the most volatile phase of the exchange. On April 2, in a speech commemorating “Liberation Day,” President Trump announced a 34% reciprocal tariff on Chinese imports, effective April 9—raising the effective rate to 54%. China matched this with a 34% tariff on all U.S. goods, taking effect April 10. Tensions escalated further when Trump threatened an additional 50% tariff unless China backed down. The next day, April 9, the U.S. raised tariffs to 104%, prompting China to respond with an 84% tariff on U.S. goods. Just two days later, on April 11, both countries ratcheted up their measures once again: U.S. tariffs reached 145%, and China increased its own to 125%, effective April 12.

In May, signs of de-escalation emerged. On May 2, the U.S. revoked the de minimis exemption for low-value imports from China and Hong Kong, eliminating duty-free treatment for packages under $800. High-level negotiations began in Geneva on May 6, led by Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer for the U.S., and Vice Premier He Lifeng for China. These talks culminated in a breakthrough agreement announced on May 12, under which both nations would significantly reduce tariffs for 90 days. The U.S. agreed to cut duties on Chinese goods from 145% to 30%, while China lowered its tariffs on American imports from 125% to 10%. The reductions officially took effect on May 14, offering a temporary pause in a trade war that had escalated.In a White House briefing, President Donald Trump declared the outcome a “total reset,” announcing a suspension of 24 percentage points from recently imposed tariffs, reducing the overall US tariff on Chinese goods to 10%.

The transportation layer of the supply chain is already shifting. According to Rotate, the current truce provides just enough runway for a short-term surge in ocean freight. This is because shippers are moving stock from warehouses to U.S. ports. “Ocean freight will likely see the biggest uptick as the 90 day pause,” they report.According to Christine Li, despite the temporary nature of the truce, multinationals have not significantly altered their long-term strategies. Instead, many are continuing to double down on risk mitigation and operational flexibility. “They continue to seek locations that offer easier access to export markets and greater logistical efficiency.” Li noted. For example, in Vietnam, companies see this 90-day window as a moment to “secure options, not pause.” Letters of Intent for ready-built factories in Binh Duong and Long An have risen by 20% in the past month. Larger greenfield projects may be on hold until Q2 2025, but activity remains robust. Firms are focusing on cap-light investments such as bonded warehouses and RBFs, allowing agile expansion without deep capital commitments. Finance teams are also “modelling blended duty scenarios and negotiating tiered rent clauses” rather than repatriating production to China.Meanwhile, in Indonesia, the outlook is one of cautious optimism. While a few firms are reassessing expansion timelines, most are continuing or accelerating their “China + 1” strategies. Industrial zones are seeing long-term lease commitments and increased demand for multimodal warehousing. Notably, Chinese companies are also showing growing interest. Multinationals are expanding into data centers, R&D hubs, and regional offices, with Li noting that “Indonesia is well-positioned to absorb the spillover from ongoing global supply chain shifts.”According to Li, the China + 1 strategy is emerging as a resilient response to these geopolitical pressures. Noting that “The model has matured from reactive “tariff-dodging” to strategic risk diversification by integrating nearshoring, friendshoring, and strategic redundancy. Most firms maintain China operations for domestic market access while developing parallel capabilities”Li explains that “Trump’s tariffs are now compelling countries to negotiate with the U.S. bilaterally.” A key theme emerging from these talks, she notes, is that “a common denominator that has emerged from these talks is the commitment to expand the share of imports from the U.S., which could involve reducing imports from other trading partners.”This shift, she says, has broader ripple effects: “The effect of Trump’s policies ripple beyond tariffs, as each country will aim to secure the best outcomes and preserve their competitive positions relative to other nations. Economic resources could also have to be diverted to mitigate the impact of higher tariffs.”Companies are watching these negotiations closely. “Businesses will no doubt look at the conclusions of these negotiations closely, as how these pan out will shape their long-term occupational strategies,” Li said. This is especially true in Southeast Asia, “as it tests each country’s appeal in China-plus-n strategies.”As companies rethink their real estate and logistics footprints, understanding policy shifts becomes essential. “Companies need to understand how trade policy shapes space demand to thrive in this new backdrop,” Li emphasized. “Undoubtedly, supply chains will shift, and these have to be monitored as the consequences will impact leasing fundamentals for office and logistics spaces in the region.”She also acknowledged that while some companies may delay immediate decisions, the longer-term trajectory remains unchanged. “Still, while the 90-day truce could cause some companies to delay some real estate decisions, this will not reverse moves to diversify supply chains in the longer term. U.S.-China trade tensions will continue to simmer which could lead to policy uncertainty; companies realise it is in their best interests to de-risk their supply chains.”