U.S.-China tariff pause: What it could mean for Long Islanders

A temporary deal to reduce tariffs between the United States and China could give Long Island businesses and consumers some reprieve on tariff-induced price hikes, local experts said.

Trade officials with both nations on Monday announced a 90-day pause, adding that the two trade rivals would reduce their reciprocal tariff rates. Stock markets reacted positively to news of the deal, which lowers the tariffs, or taxes, on Chinese goods from 145% to 30%, and from 125% to 10% on American goods.

“The consensus from both delegations this weekend is neither side wants a decoupling,” U.S. Treasury Secretary Scott Bessent said at a news conference Monday in Geneva. “And what had occurred with these very high tariff ... was an embargo, the equivalent of an embargo. And neither side wants that. We do want trade."

“We want more balanced trade,” Bessent said.

President Donald Trump first announced sweeping 10% base tariffs on most countries in early April before putting a 90-day pause on their implementation for all countries except China. Trump has insisted that tariffs are a necessary tool to combat the trade imbalance between the two nations. 

Still, concerns remain as to what will happen in negotiations over the 90 days.

“One of the concerns is that for now that it’s only for 90 days and there is still a 30% tariff on most goods, and steel, aluminum and other products will probably be a little higher,” said Steven Kent, chief economist for the Long Island Association business group.

The short time period might also encourage businesses to ramp up purchases from China, further worsening trade imbalances, Kent said. 

Some local economists said the deal may pacify the markets and investors, but it doesn’t substantially change the economics of the current trade situation.

“Long term, nothing has changed as far as the structural imbalances between the U.S. and China,” Mariano Torras, economics professor at Adelphi University, said in an email Monday.

Here are four things to know about the pause in the trade war.

Will the pause result in reduced prices for Long Islanders?

While the deal represents a major shift in tone, it’s unlikely local consumers will see any reductions in the price of goods.

“I don’t think prices will go down,” said Kent, an associate professor of economics at Molloy University’s School of Business. “Maybe increases or the acceleration of prices will start to moderate, but one of the things we’ve been seeing is that businesses are starting to raise prices on other goods to offset some of the higher expenses from China,” he said.

Thomas Cook, managing partner of Blue Tiger International, an East Moriches-based international trade and supply chain consultancy, said consumers should know that the pause does not undo the elimination of the de minimis exemption with China, which allowed e-commerce retailers like Temu or Shein to ship low-cost goods to U.S. shoppers tariff-free.

“Americans' access to cheap products is going to be restricted,” Cook said. “Don’t expect that to come back.”

How will local businesses be impacted by the pause?

Cook said that in the lead-up to Monday’s announcement, between 65% and 70% of purchase orders on Chinese goods had been canceled by U.S. business owners, raising fears of empty shelves and dwindling product reserves.

With the temporary deal in place, shipments will likely resume, he said.

“Now, those purchase orders will come through and [businesses] can get that freight in here,” Cook said.

But Cook said it’s likely that some businesses will diversify the sourcing of their goods, a process that can take time and may result in slight price upticks of 10% to 15% on some consumer goods.

As Island businesses take advantage of the 90-day pause, Kent said he has concerns about businesses and consumers “frontloading” and buying as much as they can during this period of lowered tariffs.

“Many consumers and companies on Long Island are going to rush and buy the products that they need from China and that will actually make the trade deficit widen, so I don’t know how that will play” in negotiations, Kent said.

Does the deal solve business concerns over instability?

While the stock market saw gains following the deals announcement, no long-term solutions to the trade conflict have been established, said Torras, who also serves as chair of Adelphi's Finance and Economics Department.

“What the impact will be on consumers is difficult to deduce in any precise manner, but the much greater question has to do with the politics of this trade conflict," Torras said.

For Joy Moy, owner of the Joy of Acupuncture in Huntington, even preparing in advance hasn't made navigating the trade war easy. 

“Whether you call it luck or foresight, I purchased a six-month supply of my needles and my cartridges for facial procedures last fall in anticipation of tariffs,” Moy said.

While Moy said she is glad she made the investment — even if it cost her thousands more than the usual three-month supply she gets — she still worries that the current deal will fall through.

“Because there’s been so many changes on a daily basis, if not an hourly basis, what may be set for the current day could change tomorrow,” she said. “It’s the uncertainty as a small business owner that can be a killer for us.”

Acupuncturists across the country continue to be impacted, said Amy E. Mager, federal advocacy chair for the American Society of Acupuncturists.

While the reduction in trade taxes is welcome, 30% tariffs still have an impact on small operators — the majority of her organization’s membership — and the uncertainty of what could happen tamps down any sense of relief, Mager said.

What can Islanders expect at the end of the 90-day pause?

Cook said it’s unlikely that consumers and businesses will see the dizzying heights of 100%-plus tariffs going forward.

“I don’t think it’s going to come back to that severity,” Cook said. Ultimately, he added, the trade imbalance with China will likely become more favorable to the United States when the dust settles.

“It’s both good news and bad news,” he said. “The good news is Trump’s strategy could be proven good. But it’s bad news because it emboldens his aggressive pattern of throwing a grenade at someone under the table and then handing them a Band-Aid.”

With AP