Just finalized | China and the U.S. simultaneously suspend port fees for one year, while the U.S. extends its 24% tariff exemption on goods from China for another year!

On October 30, a major announcement came from the Kuala Lumpur economic and trade talks:

Regarding tariffs

• Reciprocal Tariffs: The U.S. will continue to suspend the 24% retaliatory tariffs imposed on goods from China (including Hong Kong and Macau) for another year. China has also adjusted its countermeasures against the aforementioned U.S. tariffs, and both sides have agreed to further extend certain tariff exclusion measures.

• Fentanyl Tariff: The U.S. side has canceled the additional 10% "fentanyl tariff" imposed on goods from China (including Hong Kong and Macao)—this is not a reduction of the 20% fentanyl tax to 10%, as you mentioned.

Regarding export controls

• The U.S. has suspended the implementation of the 50% penetration rule for export controls, announced on September 29, for one year.

• China has suspended the implementation of the relevant export control measures announced on October 9 for one year, and will now study and refine specific plans.

Regarding the 301 Investigation and Countermeasures

• The U.S. side has suspended the implementation of its Section 301 investigation measures targeting China's maritime, logistics, and shipbuilding industries for one year.

• China has accordingly suspended the implementation of countermeasures against the U.S. for one year.

Other aspects

• The two sides also reached consensus on issues such as fentanyl anti-drug cooperation, expanding agricultural product trade, and handling specific cases involving relevant enterprises.

• Both sides further confirmed the outcomes of the Madrid economic and trade talks, with the U.S. side making positive commitments in areas such as investment. China will work with the U.S. to properly resolve issues related to TikTok.

The future trade situation between China and the United States over the next year

While the implementation of the measures mentioned above has positive implications for the stable development of China-U.S. trade, it would be premature to assume that trade between the two countries will maintain robust growth over the next year. Trade dynamics are influenced by a variety of factors, including the global economic outlook, market demand, the sustained stability of trade policies, and geopolitical developments.

　　I. Deconstructing the Two Core Policies: A List of Tangible Financial Relief Measures

　　This policy implementation is by no means a "mere facade"—each measure precisely addresses the pain points of the industry.

　　• Tariff reductions: Covering thousands of products, directly boosting corporate gross profit margins

　　The 24% tariff suspension continues to affect key export categories such as home appliances, machinery equipment, and electronic components, accounting for more than 30% of China's total exports to the U.S. For instance, a home appliance company with annual exports of $1.5 billion to the U.S. could save over 200 million yuan in costs from this measure alone—equivalent to a 3-percentage-point increase in gross profit margin. Companies like Midea and Haier already reaped significant benefits during the first round of tariff suspensions in May of this year, when their gross profit margins rose by 2 to 3 percentage points each.

　　For the U.S. market, the suspension of tariffs has also eased inflationary pressures: previously imposed additional tariffs had pushed up electronics prices by an expected 11% to 70%, but now that prices are falling back, U.S. consumers will directly benefit.

　　•Port Fee Exemption: Shipping Companies Save Billions Annually, and Shipbuilding Industry Reclaims Orders

　　The U.S.-suspended Maritime Section 301 investigation had been a "sword hanging over the head" of the shipping industry: originally, it was planned to impose an additional fee of at least $50 per net ton on Chinese-flagged vessels calling at U.S. ports, potentially increasing the cost of a single 100,000-ton container ship by as much as $5 million per visit. Companies such as COSCO Shipping Holdings and China Merchants Ship estimated that, once the policy took effect, it could cut their annual extra expenses by more than 3 billion yuan.

　　More importantly, the elimination of discriminatory fees has allowed China's shipbuilding industry to regain its competitive edge—Chinese shipyards, which now account for 49% of global new ship orders, are experiencing a turning point. Jiangnan Shipyard revealed that three U.S. companies have already resumed negotiations for LNG carrier orders.
 

　　II. Chain Reaction in the Industrial Chain: Three Types of Enterprises Emerge as the Biggest Winners

　　Policy benefits are rapidly spreading along the industrial chain, and these sectors have already taken the lead in kicking off the "recovery mode":

　　1. Foreign trade export-oriented enterprises: Cost pressures have sharply eased, giving businesses greater confidence in order negotiations.

　　Industries with high dependence on the U.S., such as textiles and consumer electronics, are set to benefit first. Companies like Luxshare Precision, part of Apple's supply chain, can directly reduce customer costs and enhance their competitive edge in securing orders by leveraging tariff exemptions under the FOB trade model. Meanwhile, cross-border e-commerce sellers are also poised for positive momentum—taking mobile phones as an example, China’s exports of mobile phones to the U.S. accounted for 82.1% in 2024, and the continued suspension of tariffs is expected to boost the sector’s overall export growth rate back to 18%-20% for the year.

　　2. Tech Companies: An Unexpected "Time Window" Gain

　　This consensus comes with an even more intriguing "easter egg": the U.S. side has simultaneously suspended its "50% Penetration Export Control Rule," a policy once dubbed the "collective punishment ban" that had led to a backlog of over 200 semiconductor-related approval applications. With the suspension in place, companies like SMIC can resume equipment maintenance services, while Huawei's supply chain may see its procurement cycle for precision components shortened by more than 40%, buying valuable time for chip R&D efforts.

　　3. Shipping and Shipbuilding Industries: Cost Constraints Lifted, Order Volume Expected to Rebound

　　In addition to direct cost savings, U.S.-bound shipping rates may rise as trade volumes recover, enabling industry leaders like COSCO Shipping Holdings to achieve both higher volume and improved pricing. Meanwhile, shipbuilding companies such as China State Shipbuilding Corp. and CSSC Defense will benefit from an improved competitive environment, with analysts predicting their profit growth to accelerate by 5 to 8 percentage points next year.

　　III. Behind the Icebreaker Negotiations: China and the U.S. — Each Side’s “Real-World Considerations”

　　The achievement of this phased consensus fundamentally reflects both sides' rational choice based on their practical needs:

　　• The U.S. faces multiple pressures: Semiconductor companies have lost 15% of their Chinese market share due to export controls, prompting joint lobbying efforts from Intel, Qualcomm, and others; retailers are concerned that a 12% increase in product prices could spark public discontent, while agricultural states remain hopeful as China resumes purchasing soybeans, further fueling negotiations.

　　• China aligns with development needs: Lowered logistics costs help stabilize the foundation of foreign trade, the resumption of technology procurement channels is fueling momentum for high-end manufacturing, and the "flexible management" of rare earth controls further underscores China's growing influence over the supply chain—China has merely postponed implementing new measures, retaining its policy flexibility.

　　IV. Future Risk Alert: Be Wary of the Variables Behind "Phased Easing"

　　Notably, this consensus remains a "phase-specific achievement": details in areas such as agricultural trade and fentanyl control between China and the U.S. have yet to be finalized, and the approaching U.S. election could introduce risks of policy reversals. As the Ministry of Commerce pointed out, this is a "constructive dialogue based on the principle of balanced mutual benefit," rather than a definitive resolution of underlying contradictions.

　　For businesses, the most important thing to do right now is to "seize the window of opportunity to strengthen internal capabilities":外贸 companies can increase R&D investment to enhance product added value, while tech firms should capitalize on this period of procurement convenience to break through technological bottlenecks. After all, policy benefits are the "booster," but core competitiveness is the true "ballast."

　　Could this "two-way easing" become the "turning point" for China-U.S. trade? The upcoming meeting between Chinese and U.S. leaders during the APEC summit may provide a clearer answer. But at least for now, China's industrial chain has entered a crucial year of respite and renewed momentum.
 

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