Trump signs order to extend China tariff truce by 90 days

By Admin

12 Aug, 2025

Extension to Avoid Escalation
On Monday, August 11, 2025, U.S. President Donald Trump signed an executive order extending the trade truce with China for another 90 days, avoiding a potential tariff escalation between the world’s two largest economies. The previous deadline was set to expire at 12:01 am on Tuesday, which could have triggered an increase in U.S. tariffs on Chinese imports from the already high 30% level, prompting Beijing to retaliate with higher levies on American exports.

Purpose of the Pause
According to Mr. Trump’s post on Truth Social, “all other elements of the Agreement will remain the same.” The extension gives Washington and Beijing more time to address their differences and possibly prepare for a high-level summit between Trump and Chinese President Xi Jinping later this year. U.S. companies engaged in trade with China have welcomed the move, seeing it as an opportunity for stability and progress in negotiations.

Business Leaders React
Sean Stein, president of the U.S.-China Business Council, described the extension as “critical” for allowing the two governments to work towards a deal that could improve U.S. market access in China. He also stressed the importance of securing an agreement on fentanyl, which could lead to reduced tariffs and renewed agricultural and energy exports to China.

The Bigger Trade Picture
Since taking office, Trump’s trade strategy has shifted the U.S. from one of the world’s most open economies to a highly protectionist one. Average tariffs have risen from around 2.5% at the start of the year to 18.6% the highest since 1933. While the EU, Japan, and other partners accepted steep U.S. tariffs of up to 15% to avoid worse terms, China proved more resistant, leveraging its control over rare earth minerals critical for industries like electric vehicles and aerospace.

Recent Developments
In June, both nations reached a partial agreement to reduce tensions, with the U.S. easing export restrictions on chip technology and ethane, and China improving access to its rare earths for U.S. firms. This followed a May deal in Geneva that rolled back triple-digit tariffs 145% by the U.S. on Chinese goods and 125% by China on American products to 30% and 10% respectively, averting a collapse in bilateral trade and calming global markets.

Looking Ahead
While the extension temporarily averts a trade war escalation, the core disputes remain unresolved. Whether the coming 90 days will lead to a breakthrough or just another postponement will depend on the willingness of both nations to find common ground. For now, global markets and businesses can breathe a little easier but uncertainty still looms.