The United States and China have agreed to extend their tariff truce for another 90 days, averting a steep escalation in trade duties that could have amounted to triple-digit rates on each other’s goods. Announced by President Donald Trump on Truth Social and mirrored by China’s Commerce Ministry, the extension pushes the deadline to November 10, maintaining existing tariff levels while both sides continue negotiations. The truce, which was due to expire this week, gives retailers crucial breathing room ahead of the holiday shopping season.
Under the new arrangement, U.S. tariffs on Chinese goods will remain at 30% instead of jumping to 145%, while Chinese duties on American goods stay at 10% instead of rising to 125%. The move averts what analysts described as a “virtual trade embargo” between the world’s two largest economies. The decision comes as Washington and Beijing seek to address long-standing issues such as trade reciprocity, technology access, and national security concerns.
Markets responded positively to the news, with Asian stocks edging higher and currencies stabilizing after weeks of uncertainty. Trump has signaled optimism about a potential trade deal, stating that he could meet Chinese President Xi Jinping before the end of the year if negotiations progress. The current extension follows a similar 90-day pause agreed in May after talks in Geneva, and subsequent discussions in Stockholm led U.S. negotiators to recommend prolonging the truce.
Despite the progress, tensions remain. Trump reportedly sought additional concessions from China, including a sharp increase in soybean purchases, while Beijing has pushed for greater access to high-tech U.S. goods. Analysts warn that both nations are still prepared to withstand the economic impact of the dispute, with China diversifying export markets and the U.S. maintaining pressure over issues such as fentanyl flows and Beijing’s purchase of Russian oil.
Recent trade data highlights the ongoing shifts in global supply chains, with Chinese exports to the U.S. down 21.7% in July year-on-year, while shipments to Southeast Asia rose sharply. The U.S. trade deficit with China has narrowed to its lowest level in over two decades. Observers believe that the mutual economic interdependence will eventually drive a more permanent agreement, with the current extension easing tensions and buying time for a potential framework deal later in the year.
Source: Reuters