Highlights

• The U.S. discontinued IEEPA-based tariffs on China (including 10% fentanyl and 34% reciprocal duties) and replaced them with a universal 10% Section 122 import surcharge affecting all trading partners, not just China.
• China's MOFCOM is closely monitoring the situation and reserved the right to adjust countermeasures, calling for dialogue while opposing unilateral tariff actions.
• This represents a legal recalibration rather than de-escalation—tariff exposure remains but is now distributed across all imports, potentially narrowing sourcing advantages for companies that diversified away from China.

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China’s Ministry of Commerce (opens in a new tab) (MOFCOM) issued a formal response after the United States halted certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) and replaced them with a 10% across-the-board import surcharge under Section 122 of the Trade Act of 1974.

According to the Chinese statement, U.S. Customs—effective early February 24 (U.S. Eastern Time)—stopped collecting tariffs that had been imposed in early 2025 under IEEPA authority. Those measures included a 10% “fentanyl-related” tariff and a 34% “reciprocal” tariff on Chinese goods. Of the 34%, 24 percentage points had already been suspended, leaving an effective 20% incremental tariff in force prior to this change.

Following a U.S. Supreme Court ruling in a tariff-related case and subsequent executive actions, the IEEPA-based duties have now been discontinued. In their place, the U.S. invoked Section 122, which permits temporary import surcharges to address balance-of-payments concerns or related economic issues. The newly imposed 10% surcharge applies to all trading partners—not just China.

Beijing also noted U.S. signals that additional tariff tools remain on the table, including Section 301 (unfair trade practices) and Section 232 (national security).

What Actually Changed

The shift is primarily legal and structural. Rather than relying on emergency economic powers tied to fentanyl enforcement or reciprocity claims, Washington has moved to a statutory framework designed for temporary, economy-wide import adjustments.

For U.S. businesses, the implications are nuanced:

• China-specific IEEPA tariffs have been lifted.
• However, the universal 10% surcharge expands cost pressure across all imports.
• Relative sourcing advantages may narrow. Firms that diversified supply chains away from China to Southeast Asia, Mexico, or Europe may see diminished tariff differentials.

In short, tariff exposure remains—but its distribution has changed.

China’s Position: Calibrated but Cautious

MOFCOM stated it is “closely monitoring” and will “fully assess” U.S. actions before deciding whether to adjust countermeasures previously imposed in response to the fentanyl and reciprocal tariffs. China reserved the right to take “all necessary measures” to safeguard its interests.

Beijing reiterated opposition to unilateral tariff actions and called for resolution through dialogue. The statement referenced prior leadership-level understandings reached in Busan and during a February 4 call, ahead of the upcoming sixth round of U.S.–China economic and trade consultations.

Strategic Takeaway

This is not a de-escalation. It is a recalibration.

The United States appears to be repositioning its tariff framework in a way that may reduce litigation vulnerability while preserving leverage. For multinational firms, the lesson is clear: tariff risk remains a structural feature of U.S.–China trade, even if the legal scaffolding changes.

Disclaimer: This report is based on an official statement from China’s Ministry of Commerce, published through a state-affiliated channel. It reflects the position of the Chinese government. Details regarding U.S. legal actions and implementation should be independently verified through U.S. government and third-party sources before making business or investment decisions.