The trade truce between the US and China has been extended for another 90 days. US President Donald Trump signed an executive order on Monday to keep the pause in place until November 10, while Beijing also announced an extension. The US will maintain a 30% tariff on Chinese imports and a 10% tariff on American goods. According to the White House, the current extension will provide additional time for further negotiations on “remedying trade imbalances” and “unfair trade practices”. It reported a trade imbalance of about $300 billion (£223 billion) with China in 2024, the biggest of any of its trading partners. The negotiations will also try to improve access for US exporters to China, as well as address national security and economic concerns, according to the statement. A spokeswoman for the Chinese embassy in Washington stated, “Win-win cooperation between China and the United States is the right path; suppression and containment will lead to nowhere.” China also urged the United States to abolish its “unreasonable” trade restrictions, collaborate to benefit both sides, and keep global semiconductor production stable.
Tariffs, which are charges levied on goods purchased from other nations and are normally a percentage of the product’s worth, have been a major priority for Trump since he returned to the White House in January. He has consistently stated that tariffs will encourage US customers to buy more American-made goods, generate tax revenue, and stimulate investment. Referring to his global trading partners, the US president has claimed that his country has been taken advantage of by “cheaters” and “pillaged” by foreigners.
A return to heavier tariffs would have increased trade tensions and uncertainty amid concerns about the impact of tariffs on pricing and the economy. However, one US business owner told BBC Radio 4’s Today programme that the prolongation simply meant more uncertainty. “There’s no way to plan for the future of the business,” said Busy Baby’s founder, Beth Benike. “Since I have no idea what the tariff is actually going to end up being I have no control or idea about the pricing that’s going to work for my business,” according to her. Tensions between the United States and China reached a fever pitch in April, when Trump announced sweeping new tariffs on goods from around the world, with China incurring some of the highest taxes.
Beijing replied with duties of its own, igniting a tit-for-tat spat that saw levies reach triple digits and nearly halt commerce between the two countries. In May, the two sides agreed to set aside some of these restrictions. That agreement resulted in an additional 30% duty on Chinese goods entering the US compared to the beginning of the year, while US goods face a new 10% tariff in China. The two sides continue to address concerns like as access to China’s rare earths, its purchases of Russian oil, and US restrictions on sophisticated technology sales to China, particularly semiconductors.
Trump recently lifted some of those export restrictions, enabling companies like AMD and Nvidia to resume sales of specific processors to Chinese companies in exchange for sharing 15% of their earnings with the US government. The “unprecedented” pact has sparked criticism, with some dubbing it a “shakedown”. The US is also asking for TikTok to be spun out from its Chinese owner ByteDance, a move that Beijing opposes. Earlier on Monday, in remarks to reporters, Trump said negotiations were going “nicely” but did not commit to prolonging the truce. He had urged Beijing to raise its imports of US soybeans the previous day.
Despite the suspension, trade flows between the nations have been hampered this year, with US official numbers showing that US imports of Chinese commodities in June were roughly reduced in half compared to June 2024. In the first six months of this year, the United States imported $165 billion in goods from China, a 15% decrease from the same period previous year. American exports to China declined by about 20% year on year during the same period.
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