US, China Hold High-Level Call as Tariffs Cut to 30%, Shipping Costs Surge, and Huawei AI Chip Curbs Imposed

Senior officials from the United States and China, including Chinese Vice Foreign Minister Ma Zhaoxu and U.S. Deputy Secretary of State Christopher Landau, held a phone call on Thursday, agreeing to maintain open lines of communication. The conversation follows recent high-level talks in Geneva and a meeting between Ma and U.S. Ambassador to China David Perdue. Both sides discussed issues of mutual interest, including trade and fentanyl flows.

Earlier this month, the U.S. and China issued a joint statement temporarily reducing tariffs for 90 days, lowering U.S. tariffs on Chinese goods from 145% to 30% and Chinese tariffs on U.S. goods from 125% to 10%. The tariff truce has led U.S. companies to accelerate imports from China before the reprieve expires, resulting in a surge in shipping activity. Shipping costs from China to the U.S. West Coast are set to rise from $3,500 to $6,500 per 40-foot container starting June 1, with East Coast rates increasing to $7,500 and a possible further hike to $8,500 per container by June 15. Chinese ports are reported to be at capacity, and U.S. supply chains are experiencing delays of 7-10 days.

Despite the temporary easing of tariffs, tensions persist over technology restrictions. The U.S. has imposed new controls targeting Chinese tech giant Huawei's artificial intelligence chips and has warned companies not to use Chinese-made AI chips. Beijing has criticized these measures as unilateral and accused Washington of undermining recent trade talks, while warning of possible retaliatory actions, including invoking its Anti-Foreign Sanctions Law and tightening export controls on rare earths.

Chinese officials have reiterated their commitment to de-escalating trade tensions and to opening markets to American businesses, as highlighted in a meeting between Chinese Vice Premier He Lifeng and JPMorgan's Jamie Dimon. However, they have also emphasized their intent to safeguard China's sovereignty and interests.