US extension of its truce on tariffs is just kicking the can further down the road — Phar Kim Beng

Malay Mail

a day ago

AUG 12 — Donald Trump's latest move to extend the 90-day pause on punitive tariffs with China until November 9, 2025, is less a triumph of diplomacy than a tactical delay — a familiar act of kicking the can down the road.
Come November 9 2025 there is no certainty that US would act any differently from now since Christmas and New Year would be around the corner. It would be officially one year away from the mid term of American Congress in 2026. Should prices should up in 2025, they can't come down in 2026 to give the Trump Administration the necessary electoral advantage.
What's happening in US trade tactics now demonstrate the weak hand that Trump possesses. Although in the larger scheme of things, given the anaemic growth of Chinese economy, the US does feel it is more superior. By kicking the can down the road, delays become a way to test the extent to which China can withstand even more uncertainty in the months ahead.
The reality is that markets may breathe easier for now, avoiding the immediate shock of triple-digit tariffs — up to 145 per cent from the US and 125 per cent from China.
Research from Goldman Sachs has shown that up to June 2025, all the tariffs imposed by Trump have been absorbed by 22 percent of the American consumers. If deeper trade war begins to unfold, up to 67 percent of the American consumers would have to absorb the cost of pricier goods.
Yet the fundamental tensions between US and China remain unchanged. Both refuse to budge but to keep talking.
This is not the architecture of a durable peace in trade relations; it is the scaffolding of temporary political theatre. With or without Trump in future, trade wars will always befuddle Sino US relationship not unlike the tech war. Since what offends Washington DC is China's perennial trade surplus against the US.
The timing of extending the truce, however, is far from coincidental. The extension spares American consumers from a potential price shock ahead of the holiday shopping season in between August and November 2025 too.
Electronics, toys, and clothing will still be expensive, but the narrative of 'stability' can be sold and re-told; even though any form of trade wars are usually ruinous on both and all sides. In the short term, Trump's extension is a neat political maneuver. In the long term, it is strategic drift disguised as progress. Since this is the third time that Trump has extended the truce. While Trump's extension can test the patience of China, it can also reveal the inability of US to execute a full decoupling from China. If anything, the two may well have to concede on the need to recouple.
For now, Trump is taking his usual hardline on trade. For one, by demanding that China quadruple its soybean purchases.
This move exemplifies the problem: headline-friendly but strategically shallow since Trump cannot come around to admit that American economy is addicted to imports not from China but many parts of the world.
An extension on the truce does nothing to address structural imbalances, safeguard technological competition, or resolve disputes over market access. Instead, it sets the stage for further brinkmanship when the next deadline approaches — whether in 90 days or 900. When prolonged, the game Trump plays will be akin to the politics of muddling through; even though time and again he will insist that he has not detracted from Making American Great Again.
Even more worrying is the precedent of monetizing export rights, with US tech giants such as Nvidia and AMD reportedly paying 15 per cent of their China revenues just to keep selling in the Chinese market. Trump has turned to extorting from American firms.
Such measures are not a sign of strategic clarity; they are a tax on global interdependence, one that risks cascading into other sectors and allies.
For Southeast Asia, and Asean in particular, this prolonged uncertainty is more than a background hum — it reverberates across supply chains, commodity prices, and regional investment climates. Trump likes international trade, in other words, only when everything goes his way. Asean can comprehend this logic. But Asean would have to consolidate its own markets as well as reaching out to the likes of BRICS.
For now the pause may delay turbulence, but it also delays clarity, leaving governments and businesses in a perpetual state of hedge and recalibration.
Trump's extension is therefore not a resolution but an intermission. It buys time, not trust; optics, not outcomes.
The US appears unwilling to either escalate decisively or negotiate conclusively. Instead, it is content to occupy a grey zone of suspended tension — enough to posture, never enough to settle. Meanwhile, China will grit its teeth and hold out for as long as possible. This is not necessarily difficult for China to do, granted its prior lock down of almost three years during the height of the Covid pandemic.
In trade diplomacy, as in geopolitics, momentum matters. By opting for delay over decision, Washington risks squandering whatever leverage it still holds; even though Trump believes he is piling up more pressure on China since China is aging and unable to get out of its lethargic GDP growth to hit at least 5.5 to 6 percent each year.
For now, the world watches the calendar, knowing that November may simply bring another performance of the same play — just with a new deadline.
* Phar Kim Beng is a professor of Asean Studies and Director of the Institute of Internationalization and Asean Studies at the International Islamic University of Malaysia
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.