US and China extend trade truce to avoid tariffs hike

The United States and China have agreed to extend their trade truce until 10 November, narrowly avoiding a new round of steep tariff hikes that had been set to take effect within hours.

According to a joint statement from Beijing and Washington, the higher tariffs will be suspended for another 90 days.

Last month’s negotiations ended with both sides describing the discussions as “constructive.” China’s top negotiator stated that both nations were committed to maintaining the truce, while US officials awaited final approval from President Donald Trump.

On Monday, Trump signed an executive order formalizing the extension.

Details of the Agreement

Under the deal, the US will maintain its 30% tariffs on Chinese imports, while China will continue to apply 10% tariffs on American goods.

Previously, Washington had threatened tariffs of up to 145% on Chinese products, while Beijing considered imposing 125% duties on US exports. Those extreme rates were later reduced after trade talks in Geneva in May.

The White House said the additional three months will allow for more in-depth discussions aimed at resolving “trade imbalances” and addressing “unfair trade practices.” Officials cited the US’s nearly $300bn (£223bn) trade deficit with China in 2024, the largest it has with any trading partner.

Negotiations will also cover increased market access for US exporters in China and address broader national security and economic concerns.

China’s Response

A spokesperson for the Chinese embassy in Washington emphasized:

“Win-win cooperation between China and the United States is the right path; suppression and containment will lead nowhere.”

China also urged the US to remove “unreasonable” trade restrictions, work toward mutual benefits for businesses, and safeguard global semiconductor supply chain stability.

Economic Stakes and Business Concerns

Experts warn that resuming higher tariffs could create further economic uncertainty and push up prices. However, some US business owners say the extension only prolongs unpredictability.

Beth Benike, founder of Busy Baby, told the BBC:

“There’s no way to plan for the future of the business. Since I have no idea what the tariff is actually going to end up being, I have no control or idea about the pricing that’s going to work for my business.”

Background to the Dispute

Tensions escalated in April after Trump announced sweeping new tariffs targeting goods from multiple countries, with China facing the harshest measures. Beijing retaliated with its own tariffs, sparking a trade war that saw duties climb into triple digits and brought bilateral trade to a near standstill.

A temporary agreement in May reduced some of the measures, leaving Chinese goods entering the US with an additional 30% tariff and American products facing an extra 10% tariff in China.

The ongoing talks now also include sensitive issues such as:

• US access to China’s rare earth minerals
• China’s purchases of Russian oil
• US restrictions on advanced technology exports, including microchips

Recently, Trump eased some chip export curbs, allowing companies like AMD and Nvidia to sell specific products to Chinese firms in exchange for 15% of revenues being shared with the US government.

The US is also pushing for Chinese tech giant ByteDance to divest its ownership of TikTok, a move opposed by Beijing.

Trade Flows Already Impacted

Despite the truce, trade volumes have fallen sharply in 2025.

• In June, US imports of Chinese goods were nearly 50% lower than in June 2024.
• In the first half of 2025, the US imported $165bn (£130bn) worth of goods from China — a 15% decline from the same period in 2024.
• American exports to China fell 20% year-on-year over the same timeframe.

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