Understanding US-China Tariff Rates in 2025

The trade relationship between the United States and China has undergone dramatic changes over the past year, creating a complex tariff landscape that businesses must navigate carefully. With multiple layers of duties stacking on top of each other, understanding the current tariff structure is essential for companies involved in cross-border trade.

Current Tariff Situation: Where We Stand

As of November 2025, the US and China have extended their tariff truce through November 10, keeping duties at manageable levels after nearly reaching trade embargo territory earlier this year. The extension prevents US tariffs on Chinese goods from jumping to 145% while Chinese tariffs on US goods remain capped at lower rates.

Currently, most Chinese goods entering the US face an effective tariff rate above 30%, combining the 10% reciprocal tariff with the 20% fentanyl-related duty. This represents a significant departure from the pre-2025 tariff environment and has forced many businesses to reconsider their supply chain strategies.

Breaking Down the Different Tariff Categories

The complexity of US tariffs on Chinese goods stems from multiple overlapping measures, each targeting different policy objectives.

Section 301 Tariffs: The Foundation

Section 301 tariffs first took effect in July 2018, marking the beginning of the US-China trade tensions. These tariffs apply to goods worth hundreds of billions of dollars and remain in place today.

The tariffs are organized into four main lists, with List 1 and List 2 carrying a 25% duty rate, List 3 also at 25%, and List 4A at 7.5%. Products affected range from chemicals and machinery to consumer electronics and textiles.

Following a statutory four-year review in September 2024, additional tariffs ranging from 25% to 100% were imposed on 14 product categories, including electric vehicles, solar cells, and semiconductors. These increases target sectors where China has focused its industrial development efforts.

Section 232 Tariffs: National Security Concerns

Section 232 tariffs address national security concerns and currently stand at 50% for steel and aluminum products from China. These tariffs have expanded over time to include derivative products.

In March 2025, the US imposed 25% tariffs on automobiles and automobile parts from all countries, including China. Later in the year, a 50% tariff was added to semi-finished copper products and copper-intensive derivative goods, effective August 1, 2025.

Most recently, new tariffs were announced on wood products, with a 10% duty on softwood timber and 25% on upholstered wooden furniture and kitchen cabinets, taking effect October 14, 2025. The rates on furniture and cabinets are scheduled to increase further in January 2026 unless a trade deal is reached.

Fentanyl Tariffs: Addressing the Drug Crisis

The US imposed an additional 10% tariff on all Chinese goods on February 4, 2025, citing concerns about fentanyl precursor chemicals. This rate was raised to 20% on March 4, 2025, where it remains today.

The stated purpose is to pressure China into taking stronger action against the flow of chemicals used in illegal drug manufacturing. Unlike some other tariffs, this duty applies broadly across almost all product categories.

Reciprocal Tariffs: The Latest Development

In April 2025, the US announced reciprocal tariffs targeting multiple trading partners, initially setting a 34% rate on Chinese goods. Following retaliatory measures, this rate briefly escalated to 125% before diplomatic negotiations brought it down to 10% for a 90-day period starting in May.

The truce was extended in August for another 90 days through November 10, 2025, providing relief for businesses preparing for the holiday shopping season. Without this extension, the combined tariff burden would have made most trade between the two countries economically unviable.

Also Read: Trump’s Second-Term Tariff Impact: The 2018 Deja Vu

How Tariffs Stack: Understanding the Total Impact

One of the most confusing aspects of the current system is how different tariffs interact. Not all duties stack on top of each other.

Section 301 tariffs and fentanyl tariffs always apply in addition to other duties. However, reciprocal tariffs do not stack with Section 232 tariffs on products like steel, aluminum, automobiles, and copper.

For Section 232 products, the tariff applies only to the metal content value, while the remaining value faces the reciprocal tariff. This partial application can significantly affect the final duty calculation.

Let’s look at a practical example. A nuclear reactor classified under HTS code 8401.10.00 faces a 25% Section 301 tariff, plus the 20% fentanyl duty, plus the 10% reciprocal tariff, plus standard 3.3% most-favored-nation duties, totaling 58.3%.

In contrast, an electric vehicle faces a 100% Section 301 tariff (from the four-year review), the 20% fentanyl tariff, the 10% reciprocal tariff, and 2% standard duties, totaling 132%.

China’s Response: Retaliatory Measures

China has not remained passive in this trade confrontation. Chinese retaliatory tariffs on US goods date back to April 2018, initially targeting agricultural products and later expanding to include industrial goods.

Currently, China applies a 10% reciprocal tariff on US goods during the truce period, in addition to earlier tariffs ranging from 2.5% to 25% on specific products like soybeans, automobiles, and chemicals.

China has also imposed targeted measures, including a 74.9% anti-dumping tariff on US polyformaldehyde copolymer (POM copolymer) as of May 2025. Additionally, China has implemented export controls on critical minerals and rare earth elements, restricting supplies of materials essential for high-tech manufacturing.

Exemptions and Exclusions: Finding Relief

Not every product faces the full tariff burden. Various exemption processes exist, though they are limited in scope.

The USTR extended Section 301 tariff exclusions for 164 Chinese products through May 31, 2025, though it remains unclear if these will be extended further.

Electronics received a significant exemption in April 2025 when computers, smartphones, semiconductors, and related products were excluded from reciprocal tariffs. However, this exemption does not apply to the 20% fentanyl tariffs, and officials have warned it may not be permanent.

For machinery under HTS headings 84 and 85, companies can apply for tariff exclusions if they demonstrate the equipment is essential and not reasonably available from domestic sources.

Goods subject to Section 232 tariffs on steel, aluminum, automobiles, and copper are exempt from reciprocal tariffs. Energy products, certain critical minerals, and pharmaceuticals also receive exemptions from reciprocal duties.

Trade Flow Impact: The Numbers Tell the Story

The tariff increases have significantly affected bilateral trade volumes. US imports from China fell 21.7% in July 2025 compared to the previous year, while Chinese exports to Southeast Asia increased 16.6% as manufacturers sought alternative markets.

Furniture imports from China dropped 22.2% in the first half of 2025 compared to the same period in 2024, with June alone seeing a 53.4% decline.

The US trade deficit with China shrank to its lowest level in more than 21 years by June 2025, reflecting the dramatic shift in trade patterns.

These shifts represent more than just statistics. They signal a fundamental restructuring of global supply chains as companies diversify sourcing away from China or absorb higher costs.

Looking Ahead: What’s Next for US-China Trade

The current tariff truce provides temporary stability, but uncertainty looms. Trade analysts expect continued negotiations between the two countries, with the possibility of a Trump-Xi summit before the end of 2025 if progress continues.

However, some experts note that Trump’s refusal to reduce the 20% fentanyl tariff suggests both sides believe they can withstand the current trade shock.

Several factors will influence the direction of trade policy in the coming months. The extension through November covers the critical holiday shopping season, giving retailers breathing room. However, without a broader agreement, tariffs could snap back to much higher levels.

New investigations are ongoing into additional product categories, including pharmaceuticals, semiconductors, and medical equipment. These could result in further tariff increases targeting specific industries.

Practical Steps for Businesses

For companies navigating this complex environment, several strategies can help manage tariff exposure:

Verify Product Classifications: Accurate HTS code classification is critical, as tariff rates vary significantly by product category. Small classification errors can result in substantial cost differences.

Monitor Exclusion Opportunities: Stay informed about exclusion request windows and application processes. While limited, these programs offer potential relief for qualifying products.

Evaluate Supply Chain Alternatives: Consider sourcing from countries not subject to elevated tariffs. Many manufacturers are already shifting production to Southeast Asia and other regions.

Plan for Tariff Stacking: Understand which tariffs apply to your specific products and how they combine. The interaction between different tariff types can be counterintuitive.

Stay Updated on Trade Negotiations: The tariff landscape can change quickly based on diplomatic developments. Regular monitoring of official announcements is essential.

Consider Customs Compliance: With higher duties come greater scrutiny. Ensure all import documentation is accurate and complete to avoid penalties and delays.

The Bigger Picture

The current US-China tariff situation reflects broader tensions between the world’s two largest economies. While trade negotiations continue, the underlying policy concerns driving these tariffs remain unresolved.

Despite the challenges, deep economic interdependence between the US and China makes pursuing alternative markets unattractive over the long term for many businesses. This reality creates pressure on both sides to find workable compromises.

For businesses, the key is maintaining flexibility while hoping for policy stability. The current environment rewards companies that can adapt quickly to changing trade rules while maintaining competitive pricing and reliable supply chains.

As negotiations continue and the November deadline approaches, businesses should prepare for multiple scenarios. Whether tariffs decrease through a comprehensive trade agreement or return to higher levels, advance planning will be essential for maintaining operational continuity and profitability in 2026 and beyond.