President Donald Trump’s trade policy with China has once again taken center stage, as the two economic giants agreed this month to a temporary truce that rolls back the most punishing tariffs imposed during their latest trade war escalation. Trump, meanwhile, continues to call on other nations to come to the table for new trade deals, backed by the threat of steep tariffs for those who refuse.

Before 2018, tariffs between the United States and China averaged just 3–4% on both sides. Decades of trade agreements had encouraged the flow of goods, benefiting consumers and businesses in both countries.

This changed dramatically during Trump’s first presidency, when tariffs on Chinese goods rose to an average of 19.3% by 2020, covering two-thirds of U.S. imports from China. China retaliated, raising its tariffs on U.S. goods to about 21% by early 2020.

This led to increased prices for the American consumer during Trump’s first term and Biden’s term 2020-2024. 

The U.S. International Trade Commission found that tariffs raised prices between 1.7% and 7.1% in the most affected sectors, such as apparel, car parts, furniture, and computer equipment. Studies also found that tariffs on specific products, like washing machines, led to significant price hikes for consumers.

The Federal Reserve estimated that the 2018–19 tariffs on China resulted in a 0.1-0.2 percentage point increase in core goods PCE (Personal Consumption Expenditures) prices, and a 0.08 percentage point increase in core PCE prices overall. Broader analyses suggest that the rise in trade barriers led to a 0.5 percentage point increase in U.S. inflation, with the effects being more persistent when tariffs affected intermediate goods used in production.

Throughout the Biden administration (January 2021–January 2025), U.S. tariffs on Chinese goods remained at the elevated levels set during the Trump era, with the average tariff rate holding steady around 19–20%. The Biden administration viewed the existing tariffs as a crucial bargaining tool. Officials were reluctant to unilaterally lift tariffs without reciprocal action from China, especially since Beijing did not remove its retaliatory tariffs or make significant changes to trade practices.

In 2024, the Biden administration implemented targeted tariff increases on strategic sectors, including electric vehicles, solar cells, semiconductors, batteries, critical minerals, and certain medical products. These new tariffs, some of which reached as high as 100% on electric vehicles and 50% on solar cells, were phased in beginning in September 2024 and scheduled to continue into 2025 and 2026.

After returning to office, Trump reignited the trade war. In early 2025, the U.S. imposed a series of new tariffs: a universal 10% tariff on all imports, with China facing much higher rates-first 125%, then as high as 145% on most Chinese goods by April. China responded with its own retaliatory tariffs, reaching 125% on U.S. products.

Facing mounting economic pressure, including the first U.S. GDP contraction since 2022 and a sharp drop in Chinese exports, the two sides reached a preliminary agreement in Geneva in May 2025. Both countries agreed to slash their tariffs by 115 percentage points for 90 days: U.S. tariffs on Chinese goods fell from 145% to 30%, while China’s tariffs on U.S. goods dropped from 125% to 10%. Despite the sharp reductions, both sides retained a baseline 10% tariff during the pause, and sectoral tariffs on items like steel and autos remained in place.

The current truce provides a window for further negotiations, but the fundamental issues remain unresolved. 

The U.S.-China truce is a temporary pause, not a comprehensive trade agreement. It does not include enforceable commitments on currency, intellectual property, or purchase targets.

The 2020 “Phase One” deal under Trump’s first term, which promised $200 billion in new Chinese purchases of U.S. goods, was never fulfilled; China bought only 58% of the pledged amount.

Trump’s administration is seeking deals with dozens of other countries, but the sheer volume of negotiations and the insistence on a 10% baseline tariff has slowed progress.

The economic toll of the United States’ ongoing trade war, fueled by sweeping tariffs on imports from China and other major trading partners, is hitting American households and the broader economy with costs that far outweigh any claimed benefits.

Multiple independent studies estimate that the average U.S. household is now paying between $1,200 and $4,600 more each year as a direct result of tariffs imposed during and after President Donald Trump’s first term.

These costs are felt through higher prices on imported goods like electronics, appliances, and clothing, as well as on domestically made products that compete with imports and have seen price increases as a result.

Major economic models project that Trump’s tariffs will reduce U.S. GDP by 0.7% to as much as 6% in the long run, depending on the assumptions used.