Tariff truce between US and China prolonged by 90 days, avoiding imminent increase in tariffs
US-China Tariff Truce Extended for 90 Days
The US and China have agreed to extend their tariff truce for another 90 days, halting planned tariff hikes and providing short-term stability for US retailers ahead of the critical holiday season. The extension was announced on August 11, 2025, and will last until November 10, 2025 [1][2][3].
The extension prevents a steep increase in tariffs where US duties on Chinese goods would have surged to as high as 145%, and Chinese retaliatory tariffs might have hit 125%. This move provides critical relief for US retailers, helping them with supply chain planning and cost control during the peak holiday shopping period. It also avoids significantly higher prices that could hurt consumer demand and margins [1][2].
The tariff suspension reduces the risk of escalating trade tensions turning into broader economic disruption. Such a scenario could have slowed global trade and increased inflationary pressures worldwide. Both Washington and Beijing emphasize the need for economic stability and are using the 90-day extension as a window to continue negotiations aimed at resolving longer-term trade issues such as intellectual property, rare earth exports, and the US trade deficit with China [1][2][3].
The extension is seen as a pragmatic move to preserve economic stability and support businesses ahead of a critical retail period while efforts toward a longer-term resolution continue [2][3]. It also buys crucial time for the seasonal autumn surge of imports for the Christmas season.
US President Donald Trump signed an executive order suspending the imposition of higher tariffs until 8:01 a.m. Saudi time on November 10. The US and China met again in Stockholm, Sweden, in late July for further trade talks. The new order prevents US tariffs on Chinese goods from shooting up to 145 percent [1].
The US trade deficit with China tumbled by roughly a third in June to $9.5 billion, its narrowest since February 2004. Imports from China early this year had surged to beat Trump's tariffs, but dropped steeply in June. Chinese tariffs on US goods were set to hit 125 percent, but have been locked in at 10 percent due to the extension [1][2].
Former US trade official Wendy Cutler said the extension demonstrates that both sides are trying to reach a deal that would lay the groundwork for a Xi-Trump meeting this fall. Ryan Majerus, another former US trade official, stated that the extension would give both sides more time to work through longstanding trade concerns [1].
Treasury Secretary Steven Mnuchin has stated that the high import duties imposed by both countries in the spring were untenable and had essentially imposed a trade embargo. Trump urged China to quadruple its soybean purchases, but analysts questioned the feasibility of any such deal [1].
China stated that the extension is a measure to further implement the important consensus reached by the two heads of state during their June 5 call, and would provide stability to the global economy [1]. Kelly Ann Shaw, a former White House trade official, suggested that Trump may have pressed China for further concessions before agreeing to the extension [1].
In summary, the tariff truce extension: - Protects US retailers from sudden cost increases during the high-sales holiday season, aiding inventory and pricing strategies. - Helps maintain supply chain continuity amid global trade uncertainties. - Mitigates risks of a sharp escalation of US-China trade conflicts that could destabilize the global economy. - Signals both sides’ commitment to continued dialogue, potentially setting the stage for a high-level summit later in 2025 [1][2][3].
[1] The New York Times, "US-China Tariff Truce Extended for 90 Days", August 11, 2025. [2] Reuters, "US-China trade talks: What we know so far", August 11, 2025. [3] Wall Street Journal, "US-China Trade Truce Extended for 90 Days", August 11, 2025.
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