China Slashes US Farm Tariffs in Historic Fentanyl Deal
China has announced a sweeping suspension of retaliatory tariffs on American agricultural products. This major transformation will reshape trade relations between the world’s two largest economies. The changes will affect many US farm goods. These include chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products.
The agreement includes China’s commitment to make substantial agricultural purchases. Chinese buyers will purchase at least 12 million metric tons of US soybeans during the final two months of 2025[-3]. The country has also pledged to buy a minimum of 25 million metric tons of US soybeans each year through 2028[-2][-3]. This move comes after the United States removed fentanyl-related tariffs on Chinese exports. The decision signals a possible easing of trade tensions between the two nations.
China lifts tariffs on US farm goods in major policy shift
Image Source: AgWeb
The Chinese government announced plans to lift retaliatory tariffs on many US agricultural products starting November 10, 2025. This policy shift comes after months of trade tensions that hit American farm exports hard in the world’s most populous nation.
Beijing suspends duties on soybeans, pork, and dairy
China’s tariff commission of the State Council will remove duties up to 15% on several US agricultural goods. The list covers a wide range of products: chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products.
US soybeans will still carry a 13% import duty according to traders. China plans to keep the 10% levies it placed after President Trump’s “Liberation Day” duties. At the same time, it will pause the 24% extra tariffs on US goods in April for one year.
“The halting of certain tariffs between China and the US aligns with the fundamental interests of both countries and their people,” China’s Ministry of Finance stated in its official notice. The ministry added that this action “meets the expectations of the international community and will help push bilateral economic and trade relations to a higher level”.
China commits to multi-year agricultural purchases
China has made big promises to buy US agricultural products over the next several years. The country will purchase at least 12 million metric tons (MMT) of US soybeans in the last two months of 2025. Beijing also promised to buy no less than 25 MMT of US soybeans yearly in 2026, 2027, and 2028.
These targets, though substantial, don’t quite reach the historical average of more than 27 MMT per year over the last decade. These numbers represent minimum purchase amounts, not maximums. China’s total purchases could reach 18 MMT if it buys the agreed 12 MMT in November and December on top of the nearly 6 MMT already purchased earlier in 2025.
China will also start buying US sorghum and hardwood logs again, though specific quantities remain unannounced.
Impact on US farmers and exporters
American agricultural producers see this agreement as a potential breakthrough after suffering from trade disruptions. China’s 57% retaliatory tariff on US pork in March 2025 led to a 13% drop in exports during the first seven months. US pork producers now expect a market revival as tariffs drop by 10%.
Soybean farmers should see substantial benefits too. Current price projections of AED 36.72 per bushel suggest minimum purchase commitments would bring approximately AED 117.50 billion in revenue to US farmers.
China ranked as the top market for US soybeans before recent tensions. Chinese buyers sourced about 20% of their soybeans from the United States in 2024, down from 41% in 2016. They switched much of their buying to South American suppliers during this period.
“This is a meaningful step forward to reestablishing a stable, long-term trading relationship that delivers results for farm families and future generations,” said American Soybean Association President Caleb Ragland. American Farm Bureau Federation President Zippy Duvall noted that “expanding markets and restoring purchases by China will provide some certainty for farmers who are struggling just to hold on”.
China halts fentanyl precursor exports to curb drug crisis
Image Source: Brookings Institution
“Synthetic opioid overdose is the leading cause of death for people aged 18 to 45 in the United States.” — Donald J. Trump, President of the United States (2025)
China has committed to implement strict measures that will limit fentanyl and its precursor chemicals flowing into the United States. This landmark trade agreement addresses one of America’s vital public health challenges – the synthetic opioid crisis taking thousands of lives each year.
List of chemicals targeted in the agreement
The new arrangement requires China to stop shipping specific designated chemicals to North America. The country will also enforce strict controls on certain chemical exports worldwide. These actions build upon China’s previous regulatory steps, including classifying fentanyl as a controlled narcotic in 2019. China added five categories of fentanyl precursor chemicals to its regulatory list on February 1, 2018, and September 1, 2024.
China implemented regulations on seven chemicals on September 1, 2024. Three of these compounds play a direct role in manufacturing illicit fentanyl. The regulatory framework now covers dozens of deadly substances. Chinese authorities took additional steps in March 2024 to schedule previously uncontrolled substances including protonitazene, piperidone, and 1-BOC-4-AP.
How China plans to enforce export controls
The country’s enforcement strategy contains multiple elements that aim to disrupt the fentanyl supply chain at its source. The National Narcotics Control Commission has alerted pharmaceutical companies in Chinese provinces about active monitoring of precursor export controls. Chinese authorities have started shutting down websites that sell precursor chemicals to international criminal groups.
China expanded its commitment to include enforcement cooperation on pill press exports – equipment that criminals use to produce counterfeit pills. The country had avoided regulating pill presses earlier to protect economic interests.
Representatives from Chinese banks now attend US-China counternarcotics meetings, marking the start of anti-money laundering cooperation. This shows a major change in approach, since China had refused such cooperation despite Chinese money launderers working with Mexican cartels.
China has begun acting on information the US provided about Chinese drug networks. This sharing of intelligence shows substantial progress in bilateral cooperation, which had stopped several years ago after US sanctions on a Chinese entity over alleged human rights violations in Xinjiang.
US response to fentanyl-related commitments
The United States will reduce tariffs on Chinese imports that were meant to stop fentanyl flows. A 10-percentage point reduction in the cumulative rate will take effect November 10, 2025. The US will also keep its suspension of increased reciprocal tariffs on Chinese imports until November 10, 2026.
Treasury Secretary Scott Bessent said working groups from both countries would establish clear measures to track success in reducing fentanyl flows. The Biden administration called China’s regulatory actions a “valuable step forward” in fighting US overdose deaths.
Early data shows promising results from these joint efforts. The Centers for Disease Control and Prevention reported a 10 percent decrease in US overdose deaths in 2023. Deaths fell another 12.7 percent between May 2023 and May 2024. San Francisco, which faced severe impacts from the fentanyl crisis, saw drug-related deaths drop by 15 percent.
Some American officials and lawmakers remain skeptical. Republican investigators worry that Chinese subsidies for chemical firms exporting fentanyl-related chemicals continue. They found no new evidence of China planning to prosecute companies that supply the criminal fentanyl chain. A senior Biden Administration official admitted that “the PRC can do a lot more” but highlighted these steps as leverage to “push them to do more”.
US reduces tariffs and suspends regulatory actions
Image Source: Reuters
The United States has revealed a series of tariff reductions and regulatory suspensions to acknowledge China’s agricultural and fentanyl control commitments under their complete trade agreement. This marks a transformation in America’s economic relationship with Beijing after months of rising tensions.
Tariff rollback timeline and scope
The United States plans to cut tariffs on Chinese imports related to fentanyl controls by 10 percentage points starting November 10, 2025. The current 20% fentanyl-related tariff will drop to 10%. These adjustments will reduce America’s overall tariff rate on Chinese imports from 57% to 47%.
Washington will keep its suspension of increased reciprocal tariffs on Chinese imports until November 10, 2026. The existing 10% reciprocal tariff stays in effect during this period. This continues the peace agreement that began in May 2025, when U.S. tariffs on Chinese goods decreased from 145% to 30%.
Section 301 exclusions extended
The new agreement lengthens certain Section 301 tariff exclusions beyond their original November 29, 2025 expiration date. These will now last until November 10, 2026. The Office of the United States Trade Representative had previously extended these exclusions from August 31, 2025, to the November date.
The extensions cover 178 specific products previously reinstated under HTSUS headings 9903.88.69 and 9903.88.70. Products entered for consumption or taken from warehouse between September 1, 2025, and the new expiration date fall under these exclusions.
Suspension of end-user control rules
The U.S. will pause the implementation of the “Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities” interim final rule for one year. This “Affiliates Rule” or “50% Ownership Rule” would have automatically applied export restrictions to entities with 50% or more ownership by already restricted companies.
Starting November 10, 2025, the suspension will protect thousands of Chinese firms from bans on purchasing U.S. technology goods and semiconductor manufacturing equipment. This represents one of the agreement’s most important benefits for China’s technology sector.
The U.S. will also suspend its responsive actions under the Section 301 investigation of China’s maritime, logistics, and shipbuilding sectors for one year. This includes new port fees that would have cost Chinese vessels millions of dollars per U.S. port visit.
Deal unlocks trade in rare earths and semiconductors
Image Source: GovCon Exec International
“The CCP does not lack the capacity to severely blunt the global illicit opioid epidemic; it simply is unwilling to do so.” — Donald J. Trump, President of the United States (2025)
The US-China trade agreement opens up critical supply chains for strategic minerals and semiconductors in two vital sectors.
China issues general licenses for critical minerals
Beijing will issue general licenses for rare earths, gallium, germanium, antimony, and graphite exports to benefit US end users and their suppliers worldwide. This move removes China’s export controls imposed in April 2025 and October 2022. Companies with approval can now export these materials multiple times without individual shipment permissions. Treasury Secretary Scott Bessent warns about Chinese rare-earth supply dependence. “The Chinese have cornered the market, and at times, they’ve proved unreliable partners”.
Resumption of chip exports from Nexperia facilities
China has lifted restrictions on chip exports from Nexperia’s Chinese facilities, marking a major development. The Dutch-headquartered chipmaker, owned by Chinese company Wingtech, makes simple power control chips that are vital for automotive systems. These components cost just a few cents each but connect car batteries to motors, lights, sensors, braking systems, airbags, and entertainment systems. US auto production would have started shutting down within weeks without a steady supply, according to automaker warnings.
Termination of Chinese investigations into US tech firms
China ended up agreeing to stop various investigations that targeted US semiconductor companies. The agreement stops antitrust, anti-monopoly, and anti-dumping investigations into US chip companies like Nvidia and Qualcomm.
Businesses prepare for compliance and new opportunities
Image Source: The Wall Street Journal
The recent landmark trade agreement has prompted companies in many sectors to adapt their operations. They aim to seize new opportunities while staying compliant with evolving regulations.
Agricultural exporters adjust logistics and contracts
American agricultural businesses are reorganizing their supply chains to respond to China’s policy changes. They need to prepare for major purchasing commitments from China in both short and long term. This requires them to reassess their logistics and contracts from late 2025 through 2028. The modified tariffs have already affected agricultural stocks. Deere & Co.’s price increased by 5.5% while Archer-Daniels-Midland Co. rose 5.9% in just one week.
The road ahead has its hurdles. Chinese buyers still pay a 13% duty on US soybeans, making American shipments more expensive than Brazilian options. “We don’t expect any demand from China to return to the US market with this change,” said one international trading company representative.
Tech and shipping firms reassess supply chains
The new general licenses have made rare-earth elements, gallium, germanium, antimony, and graphite more accessible. Companies that rely on these critical minerals must now develop reliable risk mitigation strategies. These include diversifying suppliers, maintaining buffer inventories, and planning for contingencies before they commit to China-centric manufacturing.
Maritime and logistics sectors have caught the attention of shipping stakeholders as Chinese measures get removed. A one-year pause in port service fees benefits both Chinese vessels at US ports and American exporters looking for competitive shipping rates to Asian markets.
Legal experts advise on licensing and documentation
Legal experts suggest businesses should map their affected stock-keeping units and Harmonized Tariff Schedule classifications. This helps identify areas where the 10% tariff reduction applies. Compliance teams must get ready for China’s general license frameworks. They need to document end-use and supply chains properly to meet licensing requirements.
Experts recommend keeping track of upcoming guidance from US agencies. The Trade Representative, Commerce Department, and Customs and Border Protection will provide details about implementation schedules, documentation needs, and possible clarifications or exceptions.
A landmark deal between the world’s largest economies marks a major reset in US-China trade relations after years of rising tensions. China’s decision to suspend retaliatory tariffs on American agricultural products, along with big purchasing commitments through 2028, shows their readiness to rebuild trade partnerships that suffered under previous measures.
The agreement goes way beyond farm goods. China’s pledge to stop fentanyl precursor chemical exports tackles a major health crisis in the United States. Recent data shows these efforts might already help reduce overdose rates across America. The United States has responded by cutting tariffs on Chinese imports and stopping several regulatory actions that would have limited Chinese companies’ access to American markets.
Strategic sectors reap major benefits from this deal. The removal of export controls on rare earth minerals and semiconductors helps fix supply chain problems that threatened manufacturing in many industries. American automakers can now get crucial power control chips from Nexperia’s Chinese facilities, which prevents devastating production shutdowns.
Both countries show a practical approach through this agreement. Economic interests have won out despite ongoing geopolitical differences, creating room to work together on shared concerns. Trade representatives must now tackle the complex job of putting these changes in place while businesses rush to adjust their supply chains and compliance protocols.
Some hurdles still exist. US soybeans face tough competition from Brazilian alternatives due to leftover duties. Yet this agreement marks a turning point. The road ahead needs careful tracking of commitments from both sides, especially China’s enforcement of fentanyl controls and following through on agricultural purchase promises.
This deal shows how deeply connected the world’s two largest economies are. They recognize that working together, even with limits and conditions, serves their economic interests better than endless conflict. The agricultural sector, tech companies, and global supply chains will benefit from this new stability, even as strategic competition continues.
