US-China tariff truce renewed, avoiding near trade embargo

Canada News.Net

19 hours ago

WASHINGTON/BEIJING: The United States and China have agreed to extend their current tariff truce for another 90 days, sidestepping sharp duty increases that were set to take effect this week and giving both sides more time to negotiate on trade disputes.
U.S. President Donald Trump said on his Truth Social account that he had signed an executive order delaying higher tariffs until November 10 at 12:01 a.m. EST. China's Commerce Ministry announced a matching pause early on August 12, postponing additional tariffs and delaying trade and investment restrictions on certain U.S. firms announced in April.
Without the extension, U.S. tariffs on Chinese goods would have surged to 145 percent and Chinese tariffs on American products to 125 percent, levels analysts said would have amounted to a near trade embargo. For now, the truce keeps U.S. tariffs on Chinese imports at 30 percent and Chinese duties on U.S. goods at 10 percent.
The agreement comes just before the seasonal rush of imports for the holiday shopping period, covering goods from electronics to toys. Trump said at a news conference that he has a "good relationship" with Chinese President Xi Jinping and told CNBC last week that if a broader deal is reached, he hoped to meet Xi before year's end.
Beijing called the extension "a measure to further implement the important consensus" reached during a June 5 call between the two leaders and said it would support stability in the global economy.
Wendy Cutler, a former senior U.S. trade official now at the Asia Society Policy Institute, described the move as "positive news" and a sign both sides are exploring a possible deal that could pave the way for a Xi-Trump meeting this fall.
The tariff truce was first announced in May after talks in Geneva, with negotiators meeting again in Stockholm in late July. Treasury Secretary Scott Bessent has argued that the triple-digit duties imposed earlier this year were unsustainable.
Kelly Ann Shaw, a former White House trade official, said the last-minute nature of the extension fit Trump's negotiating style, noting he likely pushed for extra concessions. Over the weekend, Trump urged China to quadruple soybean purchases, though he dropped that demand at the beginning of this week.
Ryan Majerus, a former U.S. trade official, said the delay "will undoubtedly lower anxiety on both sides as talks continue" toward a potential framework agreement in the fall.
U.S. Commerce Department data show imports from China spiked early in the year to beat tariffs but plunged in June, cutting the U.S. trade deficit with China to US$9.5 billion—its smallest since 2004. Over five months, the gap has narrowed by $22.2 billion, a 70 percent year-on-year reduction.
Washington has also pressed Beijing to curb purchases of Russian oil as part of efforts to pressure Moscow over the war in Ukraine, with Trump warning of possible secondary tariffs if those imports continue.