The United States and China have extended a tariff truce for another 90 days, staving off triple-digit duties on Chinese goods as US retailers get ready to ramp up inventories ahead of the critical end-of-year holiday season.
US President Donald Trump announced on his Truth Social platform that he had signed an executive order suspending the imposition of higher tariffs until November 10, with all other elements of the truce to remain in place.
China’s Commerce Ministry issued parallel moves on Tuesday, saying it would adopt and maintain all necessary measures to suspend or remove non-tariff measures.
Trump on Sunday had demanded China quadruple its purchases of US soybeans, but the order included no mention of any additional purchases.
“The United States continues to have discussions with the PRC to address the lack of trade reciprocity in our economic relationship and our resulting national and economic security concerns,” Trump’s executive order stated.
“Through these discussions, (China) continues to take significant steps toward remedying non-reciprocal trade arrangements and addressing the concerns of the United States relating to economic and national security matters.”
The tariff truce between Beijing and Washington had been due to expire on Tuesday. The extension until early November buys crucial time for the seasonal autumn surge of imports for the Christmas season, including electronics, apparel and toys at lower tariff rates.
The new order prevents US tariffs on Chinese goods from shooting up to 145 per cent, while Chinese tariffs on US goods were set to hit 125 per cent – rates that would have resulted in a virtual trade embargo between the two countries. It locks in place – at least for now – a 30 per cent tariff on Chinese imports, with Chinese duties on US imports at 10 per cent.
“We’ll see what happens,” Trump told a news conference, highlighting what he called his good relationship with Chinese President Xi Jinping.
Trump told CNBC last week that the US and China were getting very close to a trade agreement and he would meet with Xi before the end of the year if a deal was struck.
The two sides in May announced a truce in their trade dispute after talks in Geneva, Switzerland, agreeing to a 90-day period to allow further talks. They met again in Stockholm in late July, and US negotiators returned to Washington with a recommendation that Trump extend the deadline.
Treasury Secretary Scott Bessent has said repeatedly the triple-digit import duties both sides slapped on each other’s goods were untenable and had essentially imposed a trade embargo between the world’s two largest economies.
“It wouldn’t be a Trump-style negotiation if it didn’t go right down to the wire,” said Kelly Ann Shaw, a senior White House trade official during Trump’s first term and now with law firm Akin Gump Strauss Hauer & Feld.
Imports from China early this year had surged to beat Trump’s tariffs, but dropped steeply in June, Commerce Department data showed last week.
The US trade deficit with China tumbled by roughly a third in June to $US9.5 billion, its narrowest since February 2004. Over five consecutive months of declines, the US trade gap with China has narrowed by $US22.2 billion – a 70 per cent reduction from a year earlier.
Washington has also been pressing Beijing to stop buying Russian oil, with Trump threatening to impose secondary tariffs on China.
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