The United States and China have agreed to extend their trade truce for another 90 days, narrowly avoiding a fresh escalation in tariffs between the world’s two largest economies.
On Monday, President Donald Trump signed an executive order pushing the pause until November 10, while Beijing confirmed it would maintain its current tariff freeze. The move means US duties on Chinese imports will remain at 30%, and China will keep its 10% tariff on American goods.
The decision came just hours before steep tariff increases were due to take effect. Earlier this year, Washington threatened duties as high as 145% on Chinese products, while Beijing countered with levies of up to 125% on US shipments. Both sides eased those rates after a round of trade talks in Geneva in May.
According to the White House, the truce will allow negotiators more time to address “trade imbalances” and “unfair trade practices”, citing a nearly $300 billion US trade deficit with China in 2024—the largest with any trading partner. Talks will also focus on expanding market access for US exporters and tackling national security and economic concerns.
A spokesperson for the Chinese embassy in Washington reiterated Beijing’s preference for cooperation: “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 lift what it called “unreasonable” trade restrictions, emphasizing the need to stabilize global semiconductor supply chains.
Lingering Uncertainty for Businesses
While the extension averts immediate tariff hikes, it has done little to ease uncertainty for American businesses dependent on Chinese goods.
“There’s no way to plan for the future of the business,” said Beth Benike, founder of Busy Baby. “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.”
Trade tensions peaked in April after Trump announced sweeping tariffs on goods from multiple countries—China facing the steepest penalties. Beijing retaliated in kind, triggering a tit-for-tat escalation that nearly froze bilateral trade.
Under the current agreement, Chinese goods entering the US face 30% tariffs, while US exports to China carry a 10% levy. Negotiations remain ongoing over rare earth exports, China’s purchases of Russian oil, and US restrictions on advanced technology sales, including semiconductor chips.
Trump recently eased some chip export curbs, allowing firms such as AMD and Nvidia to resume certain sales to China in exchange for sharing 15% of revenues with the US government. The administration is also pressing for TikTok to be spun off from its Chinese owner, ByteDance—a move opposed by Beijing.
Trade Flows Already Slowing
Even with the truce, trade volumes have dropped sharply in 2025. US imports of Chinese goods in June were nearly 50% lower than in June 2024. In the first half of this year, the US imported $165 billion worth of Chinese products—down 15% year-on-year—while American exports to China fell roughly 20%.
The 90-day reprieve now sets the stage for another tense deadline in November, with the global economy watching closely for signs of a breakthrough—or another round of tariff escalation.