A high-risk trade dispute gets a pause
The United States and China have agreed to extend their tariff truce for another 90 days, averting an immediate escalation in duties between the world’s two largest economies.
President Donald Trump signed an executive order on Monday pushing back the deadline for higher tariffs until November 10. Beijing announced a parallel extension through state media.
The move maintains the current 30% US tariff on Chinese imports and China’s 10% levy on American goods – sidestepping a planned jump to 54% and 34%, respectively. The truce, originally reached in May, paused what had been triple-digit tariffs that sharply reduced bilateral trade.
The White House said the extension will allow more time for negotiations on “remedying trade imbalances” and addressing “unfair trade practices.” It cited a $300 billion US trade deficit with China in 2024. CNN reported that talks also aim to expand market access for US exporters and address issues including rare earth supply, semiconductor trade, and China’s purchases of Russian oil.
Double-edged sword
The agreement follows recent developments in the technology sector. Nvidia and AMD have agreed to pay the US government 15% of revenue from AI chip sales to China, a condition tied to eased export restrictions.
Treasury secretary Scott Bessent, who participated in the Sweden negotiations that preceded the extension, said he raised concerns about China’s $15 billion in dual-use technology sales to Russia and its purchase of sanctioned Iranian oil. Rare earth exports remain a sticking point, with Trump accusing Beijing of failing to meet commitments. The US is also pressing for a domestic buyer for TikTok or a ban.
Despite the extension, business uncertainty remains. Beth Benike, founder of US baby product firm Busy Baby, told the BBC, “There’s no way to plan for the future of the business” without knowing final tariff rates.
Goldman Sachs economists warned in a research note, cited by Bloomberg, that the cost of tariffs is increasingly likely to fall on US consumers, potentially pushing the core personal consumption expenditures inflation index to 3.2% by December.
Trade between the two nations has already slowed. US imports of Chinese goods in June were down nearly 50% from a year earlier, while exports to China fell about 20% in the first half of 2025.
US stocks closed lower Monday ahead of key inflation data expected Tuesday.
What impact do you think the 90-day tariff truce will have on businesses and consumers in both the US and China? Share your insights in the comments below.
