【CSN News】In a significant move to reshape U.S. economic policy, President Donald Trump announced two major initiatives on May 12, 2025: a de-escalation of the trade war with China and a bold plan to reduce prescription drug prices domestically.
US-China Trade Relations Reset
Following high-level negotiations in Geneva, the United States and China have agreed to a 90-day truce in their ongoing trade dispute. The agreement includes a substantial reduction in tariffs, with U.S. duties on Chinese goods dropping from 145% to 30%, and China’s retaliatory tariffs decreasing to 10% . President Trump described the outcome as a “total reset” in bilateral trade relations, emphasizing the rapid progress made during the talks.
U.S. Treasury Secretary Scott Bessent highlighted the productivity of the discussions, noting that the swift agreement suggests the differences between the two nations were not as significant as previously thought . The deal aims to alleviate the strain on global supply chains and reduce costs for American consumers.
Prescription Drug Price Reduction Initiative
Concurrently, President Trump signed an executive order targeting the high cost of prescription drugs in the United States. The order introduces a “Most Favored Nation” policy, mandating that the U.S. pay no more for medications than the lowest price paid by other developed countries .
The policy is expected to apply to a wide range of drugs, including those covered under Medicare and Medicaid, and aims to reduce prices by 30% to 80% . The Department of Health and Human Services, led by Secretary Robert F. Kennedy Jr., will be responsible for negotiating these prices. If negotiations fail, the policy will enforce the lowest international prices.
This initiative revives a similar effort from Trump’s first term, which faced legal challenges and was rescinded during the Biden administration. The pharmaceutical industry has expressed concerns, arguing that such measures could hinder innovation and lead to increased reliance on foreign drug sources .
Market Reactions and Political Implications
The announcement of these policies had immediate effects on financial markets. While European and Asian pharmaceutical stocks experienced declines, U.S. pharma shares rebounded amid broader market optimism stemming from the U.S.-China trade agreement .
President Trump’s dual focus on international trade and domestic healthcare costs underscores his administration’s commitment to economic reform. By addressing both global trade imbalances and the burden of high drug prices on American consumers, these initiatives aim to bolster the U.S. economy and improve public welfare.
As the 2025 political landscape evolves, these significant policy shifts are poised to play a central role in shaping the national discourse and influencing voter sentiment.