UKFT’s update provides insights for UK fashion and textile companies regarding the recently finalised US-China trade agreement on 12 May 2025.

The latest US-China trade agreement marks a de-escalation in the tariff conflict between the US and China. Under this deal, the US has agreed to reduce its tariffs on Chinese imports from 145% to 30% for a 90-day period.  China has lowered its tariffs on US goods from 125% to 10%. This temporary pause aims to provide a window for further negotiations and to alleviate some of the economic pressures resulting from the trade war.

US Additional tariffs, for imports into the US, are over and above the normal duty rates.

From 14 May to 3 August 2025 (US time) the formula for calculating the duty and tariff into the US for goods manufactured in China, Hong Kong and Macau is:

• Standard duty rate _________%, plus
• Additional tariff 30%

After 3 August, unless there is a change, the format would be:

• Standard duty rate _________%, plus
• Additional tariff 54%

Example: Wholesale shipments of goods Made in China, Hong Kong or Macau which attracted a 17.5% duty (as an example) currently attract a combined duty and tariff rate of 47.5% (17.5% + 30%) as opposed to 162% (17.5% + 145%) until 3 August. At the end of the 90 day period,  this 30% would potentially “snap back” to 54%.

Under the agreement, Chinese imports into the US will cost 30% more than at the start of the year, potentially rising to 54% (after “snap back”) at the end of the 90 day period.

Economists have generally responded positively, with Oxford Economics reducing the likelihood of a US recession from over 50% to 35%. Inflation forecasts have also been adjusted downward, with consumer prices now expected to rise by 3.4% by the fourth quarter of 2025, compared to the previous estimate of 4%.

US-China de minimis

De minimis shipments from China are now subject to separate arrangements.

For companies selling goods Made in China under the de minimis rules (up to $800), companies will pay 54% combined tariff and a $100 fee per package also applies. For goods over $800 a $200 per package fee will apply but for postal it remains as at present as a $100 per package fee.

Please note: More changes are expected for de minimis rules as soon as US Customs have systems in place to be able to deal with additional customs declarations and all US tariff rates are subject to changes without warning.

Related news:

• UKFT recommendations to HM Treasury and DBT on issues around US tariff changes (and de minimis) – click here.
• UKFT’s guidance on the on US tariffs is here with a full set of Frequently Asked Questions (FAQs) available for members on request. Please contact info@ukft.org for details.
• UK fashion and textile businesses: Are you seeing increased volumes of goods entering the UK market due to shifting tariffs or other trade changes? If so, please let us know so we can raise this at our upcoming meeting with the Trade Remedies Authority (TRA) – click here.