US China Trade War Intensifies: Tariffs Surge to 18.6% as Tensions Reshape Global Commerce in 2025
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US China Trade War Intensifies: Tariffs Surge to 18.6% as Tensions Reshape Global Commerce in 2025
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The average U.S. tariff rate jumped from 2.5% to nearly 27% at the start of Trump’s second term, marking the highest rate America has seen in over a century. After emergency negotiations and some relief measures, the current average sits close to 18.6% as of August. Tariffs now make up an estimated 5% of federal revenue compared to just 2% historically—showing how trade tensions have become a major fiscal lever.
One of the biggest shakeups in 2025 was the abrupt elimination of the de minimis exemption for low-value goods, which had quietly allowed roughly $800 worth of imported products to enter the U.S. duty-free. As of May, Chinese shipments under that value now face steep tariffs approaching 54%. According to Bloomberg News, this change triggered an 85% plunge in daily e-commerce parcels from China, upending supply chains and forcing logistics companies to rethink how goods are moved into the U.S.
On the Chinese side, Beijing responded quickly, exempting $40 billion in American goods from its tariffs while demanding the U.S. lift its own measures first. Both governments resumed trade talks, leading to several temporary reductions in tariff rates. In a key breakthrough, officials agreed to slash broad tariffs from triple digits down to 30% for specific goods, and the U.S. reduced tariffs on low-value items to 54%. President Trump declared the trade deal “done,” but Chinese officials insisted it was merely the start of further negotiation.
Even as talks continued, high-profile proposals surfaced in Congress—including Senator Lindsey Graham’s massive 500% sanctions tariff targeting any country, China included, that continued commerce with Russia. While this bill hasn’t passed, it’s a measure of how far some policymakers are willing to push trade as a foreign policy weapon.
Trump’s pivot toward softer rhetoric on China in July, reportedly to secure a summit with Xi Jinping, underscores the political stakes. But critics from the Economic Policy Institute and others argue that tariffs alone are unlikely to revive U.S. manufacturing jobs or boost wages in the long run. Surveys show public skepticism is rising, with a majority of independents now opposing Trump’s aggressive tariff regime.
For listeners tracking how tariffs impact their bottom line, the key watchpoint is still the uncertainty. With supply chains redrawn and consumer prices under pressure, the next round of negotiations will decide if tensions ease or escalate.
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