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Right now, the US and China have reached a provisional agreement that aims to cool trade tensions by scaling back planned tariff increases on each other’s goods.

The deal came soon after a five-page trade agreement between the US and the UK, which may prove to be an example for other negotiated outcomes.

The So What

Here are some key takeaways from BCG’s analysis of the two trade deals:

The agreements—the first of dozens promised by the Trump administration over the coming weeks—appear to confirm that the US plans to forge deals bilaterally with its trading partners on a rapid timeline, using a suite of high punitive tariffs as leverage.

The net result, however, is that US tariffs are still rising sharply—and the impact on companies and virtually all trading partners will be material.

“Businesses cannot afford to wait and see at what rate tariffs will stabilize,” says Marc Gilbert, a BCG senior managing director who leads the firm’s Center for Geopolitics.

“They must act now with the knowledge that no matter where tariff rates land, they will almost certainly be substantially higher than they were previously.”

Details of the Deals

The UK and China deals have substantial differences:

The deal with the UK appears to be the more comprehensive agreement. The US kept its 10% global tariff and agreed to drop additional levies on UK exports of steel and aluminum and up to 100,000 cars annually to the US. Among other things, the UK agreed to relax tariffs on US beef and ethanol and reduce non-tariff barriers on broader agricultural trade.

The US and China agreed to pause some tariff increases for 90 days as the two sides continue to negotiate. The US suspended its April 2 tariff and subsequent amendments of 125% on goods originating from China. These tariffs had already caused China’s exports to the US to decline by 21% year-over-year in April 2025. China dropped its retaliatory tariff of 125% and suspended non-tariff measures imposed after April 2.

However, the US will continue to apply the 10% April 2 global tariff on Chinese goods, on top of a 20% tariff the US attributed to alleged fentanyl trafficking. Specific tariffs related to intellectual property concerns (7.5% to 25%) and on other key industries on national security grounds (typically 25%) also remain in place.

On a positive note, the US-China talks appear to be a turning point in the relationship between China and the second Trump administration. The two sides appear to have developed a framework for continued dialogue, but many contentious issues remain.

“This marks the first real trade-focused negotiation between the US and China since negotiations in 2018 to 2020,” says Iacob Koch-Weser, a BCG associate director for global trade and investment.

“Given the mixed results of that agreement, however, businesses need to monitor how the two sides approach further talks and prepare for the potential impact.”

Now What

With US trade negotiations expected to continue with many nations in the months ahead, business leaders must prepare for a trade landscape that will become more complex. Here are several key implications:

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