The United States and China announced a joint agreement to suspend the majority of their trade tariffs, marking a potential turning point in years of economic tensions between the world's two largest economies.

According to a joint statement released by the White House and China's State Council, both nations have committed to reducing their additional tariffs from current levels to just 10% for an initial 90-day period, effective May 14, 2025. This represents a suspension of 24 percentage points in tariffs for both countries, dramatically easing the trade barriers that have hindered bilateral commerce.

The agreement, reached during economic and trade meetings in Geneva, specifically addresses recent escalations in the trade dispute. The United States will modify tariffs imposed under Executive Orders 14257, 14259, and 14266, issued in early April 2025. Similarly, China will adjust its corresponding tariff measures announced through State Council decrees and suspend non-tariff countermeasures implemented since April 2.

The tariff reduction has implications for the U.S. flooring industry, where tariffs on Chinese products like vinyl flooring, laminate, and luxury vinyl tile (LVT) are set to drop from the current 145% to just 30% by May 14—a reduction of 115 percentage points.

Industry analysts predict this reduction will lead to lower landed costs for importers and distributors, potentially providing price relief for U.S. retailers and consumers. The change could also increase competitive pressure on domestic manufacturers who had benefited from the steep protective tariffs.

The shift could trigger a major realignment in global sourcing strategies. Many U.S. flooring companies have relocated their supply chains to Vietnam, South Korea, and Mexico in recent years to avoid China tariffs. With the new reduced rates, some sourcing may shift back to China, particularly for high-volume, low-cost LVT production where Chinese manufacturers still dominate on price and production capacity.

U.S. domestic manufacturers, such as Mohawk, Shaw and AHF Products, have emphasized domestic supply, innovation, and premium market segments to compete beyond price alone.

The joint White House statement indicates the agreement establishes a new framework for ongoing dialogue between the two economic powers. Chinese Vice Premier He Lifeng will lead China's negotiating team, while U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will represent American interests. The parties have agreed to conduct regular discussions that may alternate between locations in China, the United States, or neutral third countries.

Trade policy experts suggest the 90-day suspension period will serve as a test phase during which both nations can assess the impact of reduced tariffs on their economies and potentially negotiate a longer-term arrangement.

Read more: Tariffs and Innovation: Resilient Flooring Market Adapts in 2025.