U.S. tariff delay mirrored by China with a 90-day extension
In a significant development, US President Donald Trump has announced an executive order suspending the imposition of higher tariffs on Chinese goods, extending the tariff truce between the two economic superpowers. This extension comes as a relief to both sides, as negotiations continue towards a potential framework deal in the autumn.
The tariff truce, initially set to expire on Tuesday, has been extended until 12:01 am EST on November 10. This decision was made following the recommendation of US negotiators who returned from talks in Stockholm, Sweden, with a positive outlook.
The extension is a measure to further implement the important consensus reached by the two heads of state during their June 5 call. It prevents US tariffs on Chinese goods from shooting up to 145%, a significant increase that would have significantly impacted businesses and consumers on both sides.
Ryan Majerus, a former US trade official, stated that the extension will lower anxiety on both sides as talks continue. Wendy Cutler, another former senior US trade official, echoed this sentiment, calling the extension positive news. Kelly Ann Shaw, a senior White House trade official during Trump's first term, suggested that Trump had likely pressed China for further concessions before agreeing to the extension.
The tariff truce extension demonstrates that both the US and China are trying to reach a trade agreement. However, the negotiations in 2022, which largely centred around managing the ongoing tariff disputes stemming from the earlier trade war, are not detailed in the current search data.
In 2025, the average US tariffs on Chinese exports have climbed to about 51.1 percent, covering 100% of goods imported from China. In contrast, Chinese tariffs on US exports average about 32.6 percent, also covering all goods. These high tariffs have escalated costs for importers and consumers in both countries, disrupted supply chains, and pushed some companies to shift production out of China.
The extension buys crucial time for the seasonal autumn surge of imports for the Christmas season, including electronics, apparel, and toys. Treasury Secretary Steven Mnuchin has said repeatedly that the high import duties imposed by both sides were untenable.
In addition, the extension also includes a parallel pause on extra tariffs by China's Commerce Ministry. Washington has been pressing Beijing to stop buying Russian oil to put pressure on Moscow over its war in Ukraine. Trump threatened to impose secondary tariffs on China due to their continued oil purchases from Russia. However, the details of these negotiations are not clear.
The US trade deficit with China tumbled by roughly a third in June to $9.5 billion, its narrowest since February 2004. Over five consecutive months of declines, the US trade gap with China has narrowed by $22.2 billion - a 70% reduction from a year earlier.
The ongoing tariff truce extension offers a glimmer of hope for a resolution in the US-China trade war. As negotiations continue, both sides will strive to find a mutually beneficial agreement that addresses the underlying issues and reduces the economic burden of high tariffs on businesses and consumers.
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