In a significant move to ease growing tensions between the world’s two largest economies, former US President Donald Trump announced the extension of a trade truce with China for another 90 days. This extension, now set to last until November 10, temporarily prevents a resurgence of tariff escalation that threatened to destabilize global markets.
Trump revealed the news via a post on his social media platform, Truth Social, stating, “I have just signed an executive order that will extend the tariff suspension on China for another 90 days. All other elements of the agreement will remain the same.”
China’s Commerce Ministry soon confirmed its reciprocal move, declaring it would also suspend any additional tariffs on American goods for the same 90-day period. Beijing reiterated that it would maintain tariffs on US products at 10 percent, while pledging to address non-tariff barriers impacting American exports.
The existing tariff truce was due to expire on August 12, following the original agreement reached in May. This initial deal saw both nations agree to temporarily suspend the majority of tariffs, lowering US tariffs on Chinese goods to 30 percent and China’s tariffs on US goods to 10 percent, while resuming exports of critical rare earth magnets to the US.
Background of the Trade Conflict
The US-China trade war escalated dramatically during Trump’s earlier tenure, with tariffs on some Chinese goods reaching up to 145 percent at the height of the conflict in April. China retaliated with its own tariffs and restrictions, including on rare earth materials vital to American manufacturing industries.
Concerns had mounted that without an extension, US tariffs would revert to these peak levels, reigniting tensions and disrupting supply chains. The truce has been crucial in stabilizing markets and allowing businesses to operate without the threat of sudden tariff hikes.
Impact on Markets and Trade
The tariff extension is widely seen as a positive development, calming fears of an immediate tariff war that could have led to increased costs for consumers and businesses globally. It also buys time for negotiators from both sides to work on complex outstanding issues, such as US concerns over Chinese purchases of sanctioned Russian and Iranian oil, and tariffs linked to fentanyl trafficking.
The additional 90 days provide an important window to continue diplomatic efforts and explore deeper trade agreements, potentially paving the way for a more lasting resolution to the conflict.
Prospects for High-Level Talks
The extension also raises the possibility of a high-profile meeting between Donald Trump and Chinese President Xi Jinping. Reports suggest Trump may travel to China for talks in late October, coinciding with an international summit in South Korea where both leaders are expected to be present.
Such a face-to-face dialogue could be pivotal in resolving remaining disputes and advancing the bilateral trade relationship beyond tariff reductions.
The 90-day tariff truce extension between the US and China represents a crucial pause in an otherwise contentious trade relationship. It reflects mutual interest in avoiding further economic disruption and provides breathing room to address difficult issues diplomatically.
While challenges remain, the extension signals a tentative thaw and a step towards rebuilding trust between two economic giants whose cooperation is essential for global stability and growth
