US and China Cut Tariffs: New Stage in Trade Relations

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In May 2025, the United States and China announced temporary tariff cuts, a major step in de-escalating the trade war between the world's two largest economies. According to TulparTech magazine, the White House cut the tariff on parcels from China worth up to $800 from 120% to 54%, while keeping a flat fee of $100, effective May 14. In response, China lifted its ban on Boeing aircraft, which could strengthen the position of American companies Reuters . The changes came after talks in Geneva, where the parties agreed on a 90-day trade pause.

Tariff reduction: What does it mean?

Under a White House order, the tariff on so-called “de minimis” packages from China has been reduced from 120% to 54%, with a flat fee of $100 remaining Yahoo Finance . The move softens the impact of closing a loophole that allowed goods worth up to $800 to enter the US duty-free. The change is a boon to Chinese online retailers such as Shein and Temu, whose business models have been hurt by the high tariffs The Guardian .

However, the agreement does not restore full duty exemptions for “de minimis” parcels, leaving uncertainty for e-commerce companies. Analysts say the 90-day pause gives businesses time to adjust, but long-term solutions are unclear Reuters .

China lifts Boeing ban

As part of the trade truce, China lifted restrictions on Boeing aircraft deliveries, a welcome development for the U.S. planemaker. An earlier ban had limited Boeing deliveries to China, but airlines will be able to receive the planes again after talks in Geneva Bloomberg . The move could strengthen Boeing's position in the Chinese market and support the company's shares, which rose 4% on news of the trade deals Yahoo Finance .

Global Context: Market Reactions

Markets reacted positively, with US indices including the Nasdaq and S&P 500 up 1.4% to 1.8% after Yahoo Finance announced a trading pause . Goldman Sachs raised its stock targets, citing the resumption of its Buy American initiative. However, analysts such as Ipek Ozkardeskaya of Swissquote Bank warn that uncertainty following the 90-day pause could hold back investment .

Critics point out that the temporary tariff cuts do not address underlying issues, such as the U.S. trade deficit with China or issues related to the fentanyl crisis. Fentanyl-related tariffs (20%) remain in place, highlighting ongoing tensions CNBC .

Opportunities and challenges for Azerbaijan

For Azerbaijan, which is actively developing trade ties with China, the tariff reduction could open up new opportunities. Chinese electric vehicles and goods are already gaining popularity in the country, and the easing of trade barriers could accelerate this trend. However, local experts urge caution to avoid trade imbalances, as discussed in the context of CleanTechnica's EV imports .

Azerbaijan can use this moment to strengthen its role in regional trade by attracting investments in logistics and green technologies. TulparTech magazine believes that strategic steps in this direction can strengthen the country's position in the international arena.

Tesla and Global Trends

The tariff cuts are also affecting automakers like Tesla, whose shares have risen 15% in the past three weeks on optimism surrounding trade talks, Yahoo Finance reports . Tesla’s Full Self-Driving (FSD) technology, which uses neural networks to enable autonomous driving, is setting the standard for the Tesla market . In Azerbaijan, where the electric vehicle market is growing, such technologies could inspire smart transportation infrastructure.

What's next?

The temporary trade pause gives businesses and governments a breathing space, but the long-term outlook remains unclear. Azerbaijan and other countries in the region can benefit from easing trade barriers, but must develop local technology and infrastructure to minimize risks. Stay tuned to TulparTech for updates on global trade and technology trends.