China Pauses Sanctions on US Companies in Trade War Climbdown

China has walked back nontariff measures imposed in response to U.S. President Donald Trump's tariff hikes.

The suspension, announced Wednesday by the country's Commerce Ministry, covers both trade and investment bans on 17 U.S. companies and a pause on export restrictions involving dual-use civilian-military goods.

Newsweek contacted the White House for comment via email.

Why It Matters

The moves are part of a broader effort to de-escalate the tit-for-tat trade war launched during Trump's first term, which sharply intensified after his April tariff hikes and led to an effective trade embargo on U.S.-China trade.

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng reached a temporary deal over the weekend to cut tariffs by 115 percent on both sides.

Trump, who hailed the deal as a "total reset," seeks to revive U.S. manufacturing and close the almost $300 billion trade deficit with China—an outcome critics call unlikely given that China exports more than three times as much to the U.S. as Washington exports to Beijing.

What To Know

In the joint statement that emerged from U.S.-China talks in Geneva, Switzerland, China pledged to suspend or cancel nontariff countermeasures it had imposed on the U.S. since April 2.

This includes a pause on the investment and trade bans placed on 17 U.S. companies, which were added to the commerce ministry's Unreliable Entity List on April 4 and 9.

In a separate statement, the ministry said it would also suspend—again for 90 days—export controls on 28 U.S. entities involving dual-use items, or products with both military and civilian applications, announced on the same two dates.

The ministry did not specify which commodities would now be allowed for export. However, it had a separate April 4 notice that banned the export of seven types of rare earths—metallic elements critical to a range of defense and civilian technologies.

China dominates the global rare earth supply chain, accounting for 60 percent of production and 90 percent of processing—a stranglehold the U.S. considers a national security risk.

What People Have Said

China's Commerce Ministry said in a statement: "To implement the consensus reached during the China-U.S. Geneva trade talks, effective May 14, 2025, the measures announced on April 4 … and April 9 … will be suspended for 90 days.

"According to the regulations, during the suspension period, domestic enterprises may apply to resume transactions with these entities, and the Unreliable Entity List mechanism will approve applications that meet the conditions."

What Happens Next

It remains to be seen how trade negotiations will unfold over the next three months.

A 10 percent blanket tariff on U.S. goods remains in effect. The U.S., for its part, maintains 30 percent duties on Chinese imports—comprising a 10 percent base tariff applied to most trade partners last month, plus an additional 20 percent penalty over China's role as a major source of chemicals used to manufacture fentanyl.