In a move that eases immediate tensions between the world’s two economic giants, President Donald Trump has extended a tariff truce with China for another 90 days. Announced on Monday via an executive order and shared on his Truth Social platform, the extension pushes the deadline for potential massive tariff hikes to November 10. This decision comes as both nations seek to expand talks beyond tariffs, incorporating issues like national security, intellectual property, and global supply chains.
The truce originated from a high-stakes standoff earlier this year. By April and May, the US and China had imposed punishing tariffs on each other’s goods—reaching as high as 145% on Chinese imports to the US and 125% on American exports to China. These measures triggered market chaos and threatened to halt bilateral trade entirely. In a May agreement reached during talks in Geneva, the two sides dialed back the rates: US tariffs dropped to 30%, while China’s fell to 10%. Subsequent meetings in London and Stockholm have focused on stabilizing relations, with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer engaging Chinese Vice Premier He Lifeng.
Trump’s announcement emphasized continuity: “I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days. All other elements of the Agreement will remain the same.” China mirrored the move, with its Ministry of Commerce confirming the extension and pledging to ease restrictions on some US companies previously hit by export controls and “unreliable entities” lists. A Chinese embassy spokesperson, Liu Pengyu, urged continued cooperation based on “equality, mutual respect, and reciprocity” to reduce misperceptions and strengthen ties.
This extension isn’t just about tariffs—it’s setting the stage for more ambitious negotiations. The Trump administration is increasingly weaving in non-trade disputes, such as national security concerns over chip sales and China’s purchases of Russian oil. For instance, Trump recently defended a deal allowing Nvidia and AMD to sell certain chips to China, in exchange for revenue shares with the US government. He also held back on threatened secondary tariffs against China for buying Russian oil, despite imposing them on India.
Experts see this as a pragmatic shift. Jeff Moon, a former assistant US Trade Representative for China, described it as “choreography” of confidence-building steps, potentially leading to a deal before a regional summit in South Korea in late October. Claire Reade, another former trade official, noted that the US has realized it doesn’t hold all the cards, especially with China’s control over rare earth minerals essential for technologies like electric vehicles and jet engines. In June, the sides agreed to ease US export curbs on computer chips and ethane while improving US access to those minerals.
For American businesses, the pause brings much-needed certainty. Industries reliant on Chinese goods, such as toys and apparel, have struggled with fluctuating costs and supply chains. Sean Stein, president of the US-China Business Council, which represents over 270 companies, called the extension “critical” for negotiating better market access, addressing trade imbalances, and planning long-term. He highlighted the need for deals on fentanyl precursors to restart US agriculture and energy exports.
However, deeper grievances linger. The US accuses China of weak intellectual property protections and subsidies that unfairly boost its industries, contributing to a $262 billion trade deficit last year. Analysts like Ali Wyne from the International Crisis Group warn that Trump’s aggressive tariff strategy—raising average US rates from 2.5% to 18.6%, the highest since 1933—has backfired in some ways, giving Beijing leverage through threats to rare earth supplies. Wyne argues the administration’s push for détente stems from “self-inflicted consequences of its earlier hubris.”
While a grand bargain remains uncertain, this 90-day window could avert economic catastrophe and foster limited wins, like increased soybean purchases or fentanyl crackdowns. As talks continue, the global economy watches closely: Will this truce evolve into lasting peace, or is it just a temporary ceasefire in a grinding trade war? For now, it offers hope—and a sigh of relief—for businesses navigating these turbulent waters.