US-China Tariff Deal / Why is China important for America, Trump did not avoid tariffs without any reason? 5 reasons

US-China Tariff Deal: US President Donald Trump has postponed his decision to impose additional tariffs on China for 90 days. Trump said in a post on social media platform X that the deadline for US-China tariffs has now been extended to November 9. Currently, the US has imposed a 30% tariff on goods imported from China. Earlier in April, the Trump administration had threatened to impose tariffs up to 245% on China, in response to which China also talked about 125% tariffs on the US. But now the US's stance seems to be softening. What is the reason behind this changed attitude? Is this America's compulsion or a strategic move? Let's go deeper into it.

America's dependence on China: In the words of figures

The trade relationship between the US and China is complex. Even though the Trump administration has repeatedly tried to show toughness against China, the figures show how much the US economy is dependent on China. According to US Import Data, the US is most dependent on three countries for its imports: Mexico, China and Canada. Mexico is in the first place, but China stands firmly in the second place. This dependence did not happen just like that, there are many solid reasons behind it.

Why is China important for America? 5 big reasons

To understand the strength of the trade relationship between China and America, it is important to look at these five reasons:

Cheap goods: China's strength, America's compulsion

Due to cheap labor and huge population in China, the production cost is very low. Getting employees on low salary gives companies an opportunity to make products cheaply. This is the reason why China is successful in selling cheap goods to countries around the world, and America is also a big buyer of it.

Strong manufacturing and supply chain

China's manufacturing capacity and supply chain are unmatched. Huge manpower, large-scale production and strong port network make it special. Even though shipping from China to America takes time, the established trade routes and infrastructure make up for this deficiency.

Huge investment of American companies in China

According to the World Economic Forum, American companies have invested heavily in China. However, investment has declined following recent tariff disputes. According to the US-China Business Council (USCBC) 2025 survey, only 48% of US companies plan to invest in China this year, down from 80% in 2024. Still, this level of investment reflects the trade interdependence of the two countries.

Increased dependency after 2001

After China joined the World Trade Organization (WTO) in 2001, US companies shifted large-scale production to China. Heavy investment in factories and assembly plants further deepened the trade relationship between the two countries. Even today, many US companies outsource part of their production to China and Mexico.

US policies and structural differences

The US has focused its manufacturing on high-value and high-tech sectors, while low-cost goods are imported from China and Mexico. Factories, supply chains, and logistics hubs in China are close to each other, which makes production easier and cheaper. The US lacks such infrastructure, which is why it is dependent on China for cheap goods.

US and China: What are they buying and selling?

The US imports cheap and in-demand goods from China, such as:

• Electrical machinery and equipment
• Toys and game consoles
• Furniture and plastic consumer goods

At the same time, in 2024, China imported the following things from the US:

• Mineral fuel and oil seeds
• Machinery and aircraft
• Soybeans and crude petroleum

What does it mean to defer tariffs?

Trump's decision to extend the tariff deadline reflects America's economic compulsions and strategic thinking. Imposing additional tariffs on China may cause American consumers to face expensive goods, which may increase inflation. Also, there is a possibility of opposition from American companies, which are worried about their investments and supply chains in China. This decision shows that even though Trump talks about strictness, the economic reality forces him to adopt a soft stance.