Key Takeaways
- The U.S. and China have agreed to reduce tariffs for 90 days following negotiations in Switzerland.
- U.S. tariffs on most Chinese goods lowered from 145% to 30%; Chinese tariffs on U.S. goods reduced from 125% to 10%.
- Small parcel imports from China face new fixed fees and a 54% tariff after closure of the de minimis loophole.
- Tariffs on steel, aluminum, and autos remain unchanged; pharmaceutical imports may face new duties.
- Input costs for agriculture and AgTech sectors remain elevated due to tariffs on fertilizers, machinery, and components.
Trump’s Tariff Latest: 90-Day Truce Reached Between U.S. and China
Following months of rising tensions, the U.S. and China have agreed to a temporary reduction in tariffs for a 90-day period. The decision was reached after high-level negotiations in Switzerland and is expected to provide short-term relief to global markets.
Under the terms of the agreement:
- U.S. tariffs on Chinese goods have been reduced from 145% to 30%.
- China has lowered its retaliatory tariffs on U.S. imports from 125% to 10%.
- A baseline 10% tariff remains on most imports, applied broadly as part of the administration’s trade strategy.
- Steel, aluminum, and auto tariffs remain at 25% and are excluded from the current agreement.
- Tariffs on Chinese goods linked to fentanyl production remain 20% above baseline levels.
Negotiations are expected to continue during the truce. However, both parties have indicated that tariffs could be raised again if progress stalls.
E-Commerce and Small Parcel Adjustments
The administration also closed the “de minimis” loophole, which had previously allowed duty-free entry for low-value shipments (under $800) from Chinese e-commerce platforms such as Shein and Temu.
- Small parcels from China now face a 54% tariff and a $100 flat fee per shipment.
- A previously proposed $200 fee was suspended as part of the truce.
These measures are designed to align smaller imports with broader trade enforcement policies.
Broader Economic and Market Impact Of The Latest Trump Tariff Updates
Markets responded positively to the announcement, with stock indices in the U.S., Europe, and Asia rising sharply after the truce was confirmed. However, trade uncertainty continues to weigh on long-term investment and planning.
- U.S. gross domestic product (GDP) contracted at an annualized rate of -0.3% for the first quarter of 2025 (January–March), the first since 2022.
- Chinese exports to the US dropped by 21% in April 2025, largely due to aggressive tariff measures imposed by the Trump administration. The most significant impact was felt in April when new tariffs took effect. China’s shipments to the US totaled $33 billion, down from $41.8 billion in April 2024. This contraction has forced China to redirect goods to other markets, including Southeast Asia.
Despite the temporary relief, tariffs remain elevated compared to levels before 2017, and businesses continue to adjust to volatile trade policies.
Trump Tariffs Agriculture Policy and Its Impact on Input Costs
The renewed tariffs continue to affect the agricultural supply chain, particularly for inputs and technology:
- Fertilizers and raw materials, such as potash from Canada and other key inputs, remain subject to tariffs. This increases operational costs for growers.
- Tariffs on steel and machinery components from China and Mexico are contributing to higher prices for agricultural equipment.
- AgTech startups report increased manufacturing costs due to tariffs on microchips, batteries, and other imported components.
- Some companies are exploring domestic manufacturing options, though these involve longer timelines and added investment.
According to University of Illinois research, fertilizer prices could increase by over $100 per ton due to current trade measures.
Sector Reactions and Investment Outlook
Industry sentiment remains mixed. Some domestic manufacturers may benefit from increased demand for U.S.-made products, but others—especially those reliant on cross-border supply chains—are facing ongoing cost pressures.
Austin L. Maness, COO of Harvest Returns, commented: “There is no greater customer than the American consumer. Countries use tariffs as an equalizer between each other’s economies. Fortunately, the U.S. has the best consumer and thus the best leverage to lead other countries to do the right thing.”
Still, many stakeholders view the truce as a short-term solution rather than a long-term fix. The unpredictability of future tariff decisions complicates planning for equipment providers, growers, and AgTech investors.
Outlook: Trump Tariffs Agriculture Policy Creates Mixed Outcomes for Ag Sector
While the 90-day tariff truce provides some short-term cost relief, producers, suppliers, and investors in agriculture and AgTech remain cautious. Input prices for fertilizers, equipment, and greenhouse materials remain elevated, and sourcing challenges persist due to trade restrictions on key partners including Canada, Mexico, and China.
For U.S. farmers, the continuation of tariffs on critical inputs—particularly potash, steel, and machinery parts—adds cost pressure at a time when margins are already tight. This has implications for planting decisions, infrastructure investment, and long-term operational planning.
AgTech companies, especially startups, face a more complex environment. Many rely on imported electronic components—such as sensors, chips, and batteries—for automation, precision farming, and robotics solutions. With component costs elevated, production timelines and scalability are increasingly constrained. Some firms are evaluating domestic sourcing, but shifts in supply chains require capital, time, and regulatory clarity.
While domestic manufacturers may benefit from increased demand, most AgTech hardware and input providers will need to manage both pricing pressure and volatility in trade policy. For controlled environment agriculture (CEA), higher capital expenditure and input costs—such as for peat moss and greenhouse materials—could delay or scale back expansion plans.
The future of trade policy remains uncertain. If tariff escalation resumes after the truce, sectors dependent on global supply chains, including AgTech and horticulture, may face renewed disruption. Conversely, a continued easing of trade restrictions could improve access to essential inputs and re-open market pathways for agricultural exports.
In the near term, stakeholders across the agriculture value chain are expected to continue adapting to an evolving trade landscape marked by both opportunity and operational risk.
