An analysis of the major trade agreements announced in May reveals key trends that could be shaping the future of global commerce and economic diplomacy
Traditional wisdom holds that if both sides are dissatisfied with a trade deal, then it must be a fair deal. The thing about this traditional wisdom, however, is that it can mistake collective panic for balance. Judging by the major trade deals that happened in May, it seems everyone decided that clinging to a branch halfway down a cliff — fingernails cracking, eyes darting, the branch groaning — is technically better than being a smear on the rocks below. Sure, its equitable… but calling it progress feels like a bit of a stretch when the starting point was on the safe ground above the cliff.
In May, major trade deals were inked between the United States, the United Kingdom, China, the European Union, and India. Additionally, there were ongoing developments in global negotiations from Asia and Africa that have been long in the making and appear to be finally reaching the finish line, if not are already in effect.
The specifics of all these agreements vary significantly, ranging from extensive documents that could fill entire volumes to broader announcements that resemble agreements in principle rather than formal trade arrangements. Still, there are significant details that can offer insight into where global trade may be headed, both in the second half of 2025 and beyond.
When dealing with the US, relief does not mean resolution
Foremost in terms of implications for the near future was the de-escalation agreement between the US and China. President Donald J. Trump’s global trade war, a brutish fight with allies and rivals alike, resulted in a pitched battle of escalation, especially with China. Tarriff rates started obscenely high out of the gate and then exploded into the triple digits as a result of tit-for-tat responses. In May, both countries announced an agreement not so much to end the conflict as to de-escalate it for 90 days, along the lines of similar cessation of tensions agreements between the US, Mexico, and Canada.
On its face, the 90-day tariff truce between the US and China was a positive development. The agreement offered a temporary pause in escalating trade tensions, walking back tariffs both generally and on more specific products. However, nobody should kid themselves that this is anything close to a long-term solution.
Under the agreement, US-imposed tariffs on Chinese goods were reduced from 145% to 30%, while China lowered its tariffs on US imports to 10% from 125%. This short-term relief still leaves massive barriers to trade still in place. While 30% and 10% appear small in comparison to the absurd levels of escalation that had effectively resulted in an embargo, these tariffs remain far above the danger levels that have led to economic calamity in the past. Indeed, US consumers are already appearing skittish, and inflation expectations have jumped to their highest levels since 1981.
The US/Chinese deal’s true benefit seems to be that the tariffs are low enough for companies to bring in enough imports to perhaps last through the holiday season, a welcome relief to be sure, especially when compared to the previous near certainty of empty shelves. However, this added level of endurance may only enable further US aggression and a reignition of the conflict after the pause. Even at the lower level, the 30% tariff on Chinese goods is also guaranteed to hit consumers and thus the broader economy if maintained.
Special relationships mean special disappointment
Developments in the Atlantic are as informative as those in the Pacific. For all the symbolic weight of a US/UK trade agreement, the final product is strikingly underwhelming. What was once pitched as the crown jewel of post-Brexit strategy has arrived years late, half-formed, and burdened with tariffs that say more about economic leverage than strategic partnership.
In fact, the trade deal maintains a 10% tariff on most UK goods, a rate notably higher than pre-trade war levels and far higher than for what the UK government was hoping, given their initial optimism and glowing welcoming of the Trump administration. The deal also has the UK opening more of its market to US agricultural goods, while the US lifted tariffs on UK-made vehicles, steel, and aluminum. Still, a continuation of tariffs will likewise blunt any US gains beyond perhaps its agricultural sector, an area itself already greatly damaged by the conflict with China and Europe.
For an agreement with the largest nominal economy in the world, the deal is nowhere near what U.K. Prime Minister Keir Starmer, or the parade of previous PMs were envisioning when they left the EU in 2020 with an eye towards closer trade relations to the US. Five years after their own disruptive maneuver, the UK seems to have gained little more than regret.
None of these deals involving the United States — whether struck with China, the UK, or others — should be mistaken for trade-flavored peace treaties. They are ceasefires, fragile and reversible, shaped more by political expedience than strategic consensus. Already, the Trump administration has hinted that even these limited truces could be scrapped with little notice if domestic conditions shift or foreign partners are deemed insufficiently deferential. After all, a US government that has broken trade commitments before offers little assurance that today’s handshake won’t become tomorrow’s threat.
In that light, the current deals don’t represent an end to the trade wars. Rather, they merely mark an intermission, one that could end the moment it becomes politically convenient to reignite the flames.
Looking towards trades deals without the US
So far, the story of May’s trade deals is one of disruption and relief that stops well short of resolution. For the US and UK, for example, the pursuit of leverage through maneuvering and changing the status quo has yielded volatile gains at best and lasting damage at worst. These latest agreements offer little in the way of structural change, and even less in terms of confidence that the agreements themselves will hold.
However, that’s only half the story — because May was a bustling month for trade deals, many of which did not involve the US. In my next piece, we will shift focus to the other end of the spectrum. From Asia’s quietly expansive dealmaking to Africa’s continental ambitions, we’ll examine how consistency, integration, and long-term planning are beginning to define the next era of global trade.
For more on the current trading environment, check out the Thomson Reuters Institute’s 2025 Tariff Survey here
