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U.S.–China Slash Tariffs Temporarily, Boosting Clean Energy Trade Prospects

The U.S. and China have mutually agreed to reduce reciprocal trade tariffs by 115% for a 90-day period starting May 14, 2025. As per the joint announcement, the U.S. has suspended all tariffs imposed since April 2, 2025, except for a retained 10?se tariff on Chinese imports—effectively reducing the tariff from 145% to 10%. China reciprocated by slashing its tariffs from 125% to 10%, excluding a continued 20% tariff on fentanyl-related goods, bringing the final applicable rate to 30% on such products.

The temporary easing marks a thaw in the long-standing tariff war that had particularly impacted the clean energy sector. The pause allows both nations to negotiate a long-term mechanism on economic and trade relations.

For India, the move creates potential opportunities. The U.S. had earlier imposed a lower 26% tariff on Indian goods, potentially boosting exports of Indian-made solar modules.

Despite this détente, the U.S. continues to enforce steep tariffs—up to 3,500%—on solar imports from Southeast Asian countries and maintains its 50% tariffs on Chinese polysilicon and solar cells. These protections reflect persistent concerns over China's industrial practices, including forced tech transfers and cyber theft, as highlighted in the USTR’s December 2024 report.