China has temporarily lifted restrictions on dozens of American companies following breakthrough trade talks with the United States, marking a significant step toward easing tensions between the world’s two largest economies.

At a Glance

• China suspended non-tariff countermeasures against 28 US entities on its “export control list” for 90 days
• The US has cut tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on US goods from 125% to 10%
• Boeing may benefit as China begins lifting its aircraft delivery ban following the trade truce
• President Trump called the agreement a “very strong deal” that aims to open China to US business
• Export controls on seven rare earth elements announced by China in April remain in place

Dramatic Tariff Reductions Signal Trade War Cooling

The reduction in tariffs represents a substantial shift in US-China trade relations. After years of escalating tensions, the United States has slashed tariff rates on Chinese goods from a punishing 145% to 30%. China responded in kind by cutting its tariffs on American products from 125% to just 10%. These mutual concessions follow comprehensive discussions where both economic powers sought to create a more stable trading environment.

Alongside tariff reductions, China’s commerce ministry announced the suspension of additional non-tariff countermeasures that had restricted American businesses. The 90-day pause affects 28 US entities previously placed on China’s “export control list,” which had prevented these companies from receiving dual-use items that could serve both civilian and military purposes. Measures targeting 17 US entities on the “unreliable entity list” have also been temporarily lifted.

Report: China Removes Ban on Boeing Deliveries After US Trade Truce

China has removed a month-long ban on airlines taking delivery of Boeing Co. planes, according to people familiar with the matter, following a breakthrough in trade talks with the US that temporarily slashed…

— Ray Wang (@rwang07) May 13, 2025

Boeing and US Defense Industry Stand to Benefit

Boeing emerges as a potential major beneficiary of the trade détente. The American aerospace giant had seen deliveries to China plummet during the height of trade tensions. With China now beginning to lift its delivery ban on Boeing aircraft, the company could regain access to one of its most crucial markets. However, the timeline for renewed shipments remains uncertain as regulatory and safety concerns continue to be addressed.

The Chinese commerce ministry stated that restrictions affecting dozens of US defense and aerospace firms will be lifted specifically “to implement the consensus reached at the China-US high-level economic and trade talks.” This represents a significant breakthrough for American defense contractors who had been unable to conduct normal business operations in China. The move could reopen supply chains and business relationships that were previously frozen.

White House document on the US-China trade agreement https://t.co/hA8mF7BwS4 pic.twitter.com/FYQjKcgKaw

— Alayna Treene (@alaynatreene) May 12, 2025

Challenges and Limitations Remain

Despite the positive developments, several obstacles to full normalization remain. China has not suspended export controls on seven rare earth elements announced in April, maintaining leverage in a sector critical to technology manufacturing. The temporary nature of the 90-day suspension also suggests China is taking a cautious approach, potentially using this period to evaluate American compliance with agreed terms before committing to permanent changes.

“Tariff announcements and heightened uncertainty about government policies in general are the dominant economic developments of more recent weeks and have caused me to look carefully at my forecasts.”, said Fed Vice Chair Philip Jefferson.

The trade truce also faces political headwinds as tension persists over other issues, particularly China’s rejection of US blame for the fentanyl crisis. Additionally, Federal Reserve Vice Chair Philip Jefferson has warned about the potential inflationary impacts of tariffs, suggesting economic uncertainty could continue despite the recent progress. Many analysts view the current agreement as the beginning of a process rather than a comprehensive solution to all trade disputes.

Economic Impact and Market Response

Financial markets have responded positively to the trade breakthrough. US stocks rose following the announcement of the US-China agreement, with oil prices also increasing. The reduction in tariffs is expected to boost online orders from China, benefiting American consumers through potentially lower prices on imported goods. The Trump administration’s decision to cut tariffs on Chinese shipments under $800 particularly benefits US shoppers who purchase from Chinese e-commerce platforms.

Chinese officials reportedly view the trade deal as a strategic win, achieving many of their demands without committing to significant economic reforms. For American businesses, the suspension of non-tariff barriers provides immediate relief and potential access to the vast Chinese market. However, the true economic impact will depend on whether these temporary measures evolve into permanent agreements and how both sides navigate the complex relationship moving forward.