The Rules Just Changed: What China’s Trade Reset Means

Last week, the US Supreme Court struck down broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA), invalidating both the 10 percent ‘fentanyl tariff’ and the 34 percent ‘reciprocal tariff’ on Chinese goods. It was a significant legal moment — and one that has moved fast.

Within days, the US pivoted to Section 122 of the Trade Act of 1974, imposing a fresh 10 percent import surcharge across all trading partners. That measure is set to expire in 150 days. Meanwhile, a sixth round of US-China trade talks is now expected shortly, building on five rounds held last year, the last of which took place in Malaysia in October.

The message from Beijing has been measured but deliberate. China’s Ministry of Commerce signaled that any adjustments to its countermeasures will come “at an appropriate time” — language that tells you everything about how carefully both sides are managing their next move.

So what does this mean for businesses on both sides of the Atlantic?

The short answer: uncertainty is not going away, but the shape of it is changing.

For years, businesses have had to navigate a tariff environment defined by executive action and geopolitical friction. The Supreme Court ruling introduces a new variable — judicial constraint on how far US trade policy can stretch under emergency powers. That is not a small shift. It signals that the legal architecture underpinning US trade action is being tested and, in some cases, redrawn.

At the same time, the move to Section 122 shows that Washington’s intent to apply trade pressure has not softened — only its legal instrument has changed. The 150-day clock on the new surcharge means businesses should expect continued flux well into the second half of 2025.

For UK-based businesses with transatlantic supply chains or exposure to US-China trade flows, this is a moment to stress-test your assumptions. Where are your dependencies? Where are your buffers? What does your sourcing strategy look like if the sixth round of talks produces meaningful concessions — or breaks down entirely?

The businesses that will navigate this best are those treating it as a strategic inflection point, not a compliance exercise.

What has changed is the pace and the unpredictability. Trade policy has always shifted — but when the legal foundations underpinning it are being challenged in the Supreme Court and new measures are being introduced with 150-day expiry dates, the window for strategic adaptation is shrinking. Boards can no longer afford to treat this as something to monitor quarterly.

The rules just changed. The question is whether your strategy has.