The recent 90-day trade agreement between the United States and China has created waves across multiple industries, including auto parts. After two days of intense negotiations in Geneva, both nations reached a temporary consensus to reduce some reciprocal tariffs, offering a glimmer of relief amidst ongoing trade tensions.

For businesses in the auto parts sector, this development could bring short-term opportunities, as well as some important considerations for future planning. Below, we’ll break down the key elements of the agreement and how they might influence your operations.

An Overview of the US & China 90-day Agreement

Here are the main highlights of the temporary U.S.-China trade agreement you need to know:

90-Day Suspension of Escalating Tariffs

Both nations have paused the implementation of escalating tariffs for the next three months, potentially softening the financial strain on businesses involved in trade.

Reduction in U.S. Tariffs on Chinese Products

The United States has agreed to lower tariffs on Chinese goods from 125% to just 10% during the 90-day period. However, it’s essential to note that this reduction applies only to newly imposed reciprocal tariffs. Other previously imposed duties, such as Section 301 tariffs, Section 232 tariffs on steel, aluminum, autos, and auto parts, and others, will remain in force.

China’s Countermove

China has pledged to remove retaliatory tariffs it introduced after April 4, 2025, and suspend additional non-tariff countermeasures brought into effect since April 2, 2025. Like the U.S., China will also retain a 10% tariff during the 90-day pause.

Efforts to Tackle Fentanyl Trade

Beyond tariff discussions, the U.S. and China have committed to tackling the flow of fentanyl and other precursor chemicals used in illicit drug production, a noteworthy step in addressing a broader socio-economic concern.

What Does This Mean for the Auto Parts Industry?

While the ease in tariff escalation is welcome news, the specific implications for auto parts businesses will differ depending on the types of goods being imported and exported. Here’s what you should know to stay ahead of the curve.

Tariff Stacking Is Still a Factor

Many auto parts fall under multiple tariff categories such as Section 232 or IEEPA duties, meaning tariffs can “stack” and still apply to certain imports despite the 90-day pause. Businesses need to remain vigilant and understand these layered costs when sourcing parts internationally.

Immediate Cost Reductions

For businesses dealing in products affected by the reciprocal tariffs, this 90-day pause will result in a significant cost reduction—from 125% down to 10%. This offers a temporary reprieve for companies, especially those heavily reliant on Chinese imports.

Long-Term Uncertainty Still Looms

While this agreement is a step toward easing tensions, it doesn’t eliminate uncertainty or resolve deeper issues in U.S.-China trade relations. Businesses should continue to plan for volatility and monitor developments closely.

Updated Industry Tools Are Key

Leveraging industry tools, like the Auto Care Association’s Tariff Calculator, allows businesses to stay informed about fluctuating duties and tariff complexities. This tool has been updated to reflect the most recent changes, helping businesses calculate applicable tariffs for auto parts imports with ease.

Maximize Insights with the Auto Parts Tariff Calculator

Navigating tariffs is challenging, but the right resources can make a big difference. The Auto Care Association has revamped its Tariff Calculator, now equipped to account for overlapping tariffs like Section 232, IEEPA, and other duty categories. If your product falls under multiple rules, the tool will even apply tariff stacking criteria to give you accurate insights right away.

By using this resource, you can make informed decisions about pricing, sourcing, and strategizing for the future. Plus, the calculator eliminates the guesswork, saving both time and potential compliance headaches.

Stay Ahead of Trade Developments

While the temporary trade agreement offers room to breathe, it’s crucial to stay proactive. Trade policies can change rapidly, and being informed is the best way to adapt and thrive. At PCFitment, we’re committed to keeping you updated on trends and changes that matter to the auto parts industry.

Reach out to our experts to discover how we can utilize maximum these 90 days, navigating trade challenges together and unlocking new opportunities for success.

Your Move

Take advantage of the current tariff changes and explore how the temporary reduction might impact your supply chain.

The road ahead may have its bumps, but with the right knowledge and tools, you’re sure to arrive at your destination successfully.