The United States and China have agreed to extend their tariff truce for an additional 90 days, with the new expiration set for November 10, 2025. This move came just hours before prohibitive triple-digit tariffs were due to be reimposed on imports from both sides—a dramatic escalation that was successfully averted by the extension.

President Donald Trump signed the executive order on August 11, 2025, formally suspending a planned hike in duties, while China's Ministry of Commerce simultaneously announced its corresponding commitment.

Under the terms of the extension, the US will maintain its current 30% tariff rate on Chinese goods rather than allow the rate to skyrocket to 145%, and China will keep a 10% tariff on US exports instead of raising it to 125%.

The truce was especially critical for American retailers preparing for the holiday season, as it prevented sharp increases in costs that would have severely disrupted supply chains and forced businesses and consumers to pay significantly higher prices.

Negotiations leading to this extension were held in Stockholm in late July, following earlier talks in London, and focused on technical aspects such as tariff suspension mechanisms, market access, and intellectual property protections.

The Stockholm meeting did not produce an immediate final agreement, but it set the stage for the August executive order. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer were present, underscoring President Trump’s final authority on any deal.

The resulting Joint Statement reflects a pragmatic and cautious approach, emphasising economic stability over escalation while leaving room for further negotiations, potentially culminating in a Trump-Xi summit later in the year.

While the extension itself does not roll back existing tariffs, it maintains the lowered rates negotiated in May and provides businesses on both sides with much-needed certainty. China’s commitment also includes suspending some non-tariff countermeasures, which had previously targeted American agricultural and energy exports.

US officials have publicly stated that ongoing Chinese purchases of Russian oil could trigger much steeper tariffs—up to 500%—under new US legislation, adding a layer of complexity and leverage to the ongoing discussions.

The extension demonstrates a mutual desire to maintain diplomatic momentum and avoid economic turbulence during a crucial period. However, US officials have reiterated their view that the persistent trade deficit with China continues to pose a threat to national security and the economy, signalling that the underlying trade disputes remain unresolved.

Both parties have characterised recent talks as constructive, and President Trump noted a positive working relationship with President Xi Jinping. The business community, particularly in the US, welcomed the move as providing time to negotiate a more comprehensive trade deal that could address market access, trade reciprocity, and long-term planning needs.

The 90-day tariff truce extension between the US and China provides important short-term relief for global supply chains and economic relations between the two largest economies, while leaving the future trajectory of their trade dispute to be determined in the subsequent rounds of negotiations.

Based On ANI Report