Trade agreement between the U.S. and China receives tariff suspension extension, lasting till November.
The US-China trade truce has been extended until November 10, 2025, offering a reprieve from escalating tariffs and providing short-term relief for supply chains amid ongoing negotiations. This extension represents a continuation of diplomatic efforts to avoid tariff increases that began with prior 90-day pauses earlier in the year [1][3].
Negotiations throughout 2025, including summits in London (June) and Stockholm (July), have focused on tariff suspension mechanisms, market access, and intellectual property protections. Although a final comprehensive agreement has yet to be reached, these talks have created a pragmatic and cautious atmosphere, with both sides agreeing to maintain the current tariff pause during continued discussions [1].
US Treasury Secretary Scott Bessent recently described the truce as "working pretty well," emphasizing that the US is satisfied with the current state of affairs, including China's resumption of shipping rare earth magnets under eased countermeasures. The administration sees China's tariffs as a significant revenue source but prefers to avoid disruption. Bessent anticipates further talks before the truce expires in November, with no immediate timeline for a presidential summit between Presidents Trump and Xi Jinping, though a meeting is desired by both governments [2].
The extra time from the tariff extension helps with supply chain planning, as industries such as electronics and toys heavily depend on manufacturing in China. However, the tariff extension does not lower tariffs below pre-conflict levels. Tariffs remain at 30% on Chinese goods heading to the US and 10% on US goods going the other way [2].
The US is pressing China to increase purchases of US goods, particularly agricultural products like soybeans. The tariff extension provides market relief for US businesses, especially ahead of the holiday season. The November deadline coincides with several diplomatic events, including the APEC summit in late October [2].
Interestingly, China holds around 92% of global processing capacity for rare earth elements, and restrictions on the export of these elements to US companies remain pointed [4]. Recently, Ford had to halt production at a Chicago plant due to shortages of rare earth elements [5]. The licensing process for exports of rare earth elements to US companies has eased slightly, with approvals at 60% in early July compared to 25% in June [6].
In summary, the current status of the US-China trade truce is a temporary tariff suspension extended to November 2025, supported by ongoing negotiations that have yet to culminate in a long-term agreement. The prospects depend on the continuation of constructive talks, with both sides showing willingness to avoid tariff escalation but remaining cautious about commitments beyond the short-term truce [1][2][3].
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