Summary
- Trump extends US-China trade truce for 90 days.
- Tariffs remain at 30% US, 10% China.
- Moves prevent new tariff hikes on imports.
- Talks continue on trade and security issues.
- Possible future summit with Xi Jinping discussed.
The extension, until Nov. 10, gives the countries more time to work out their differences and sets the stage for a potential summit between Mr. Trump and Xi Jinping, China’s leader, later this year. Mr. Trump suggested on Monday that there had been progress in the negotiations.
“They’ve been dealing quite nicely — the relationship is very good with President Xi and myself,”
Mr. Trump said at the White House.
Top economic officials had been working to finalize a provisional agreement, reached during meetings in Sweden last month, to extend the truce. The deadline for the truce to expire was Tuesday.
American officials were hopeful that the president would approve the deal during the Sweden meetings, but Mr. Trump dramatically postponed the pause until the last few hours before the deadline. They would have run the risk of intensifying the trade battle between the two biggest economies in the world, which shook international markets earlier this year, had the tariffs suddenly been reinstated.
As time runs out, Mr. Trump urged China to buy four times as many American soybeans as it currently does, pointing out that this would help close the trade gap between the United States and China.
“China is worried about its shortage of soybeans,”
Mr. Trump wrote on Truth Social in a message directed to Mr. Xi.
“Our great farmers produce the most robust soybeans.”
Mr. Trump's economic advisors were hopeful that another 90-day extension would be approved following the July negotiations in Sweden. In the absence of an agreement, U.S. tariffs on Chinese imports might go to 80 percent, according to U.S. Trade Representative Jamieson Greer. However, Treasury Secretary Scott Bessent played down the prospect, stating that only technical details remained to be worked out.
The discussions now cover more ground than just tariffs. According to Mr. Bessent, he was bringing up American concerns with his Chinese counterparts over China's surplus manufacturing capacity and its purchases of oil from Iran and Russia.
The Trump administration has adopted a transactional negotiating strategy in spite of its national security concerns on the trade in semiconductors and other goods. As part of a very unusual deal with the Trump administration, Nvidia and Advanced Micro Devices are slated to give the US 15% of the profits they get from selling AI chips to China.
The Trump administration's negotiations with China have been proceeding independently of those with other nations. Japan, South Korea, and the European Union agreed to decrease tariffs in exchange for U.S. investments in trade agreements the U.S. unveiled this month.
How does extending the US-China trade truce affect global economic stability?
The extension has injected fresh optimism into global financial markets, resulting in rallies and improved investor sentiment. It prevents the shock of sudden, steep tariff hikes that would have negatively affected stock markets, particularly in sectors heavily reliant on China.
Companies dependent on Chinese manufacturing and imports, such as technology firms, retailers, and automotive makers, benefit from predictable trade policies for the critical upcoming holiday and business seasons. This stability helps avoid costly disruptions and price increases.
The delay allows businesses to better plan inventories and operations without the immediate burden of tariff-related cost surges, ultimately protecting consumers from price spikes on goods like electronics, apparel, and toys.