U.S. and China Extend Tariff Truce by 90 Days, Averting Trade Escalation

 The United States and China have agreed to extend their ongoing tariff truce for an additional 90 days, averting the imposition of triple-digit duties on each other’s goods and offering crucial relief to global supply chains ahead of the year-end holiday season.

U.S. President Donald Trump announced on Monday via his Truth Social platform that he had signed an executive order delaying higher tariffs until 12:01 a.m. EST (0501 GMT) on November 10, with all other terms of the agreement remaining in place. Shortly afterward, China’s Commerce Ministry issued a parallel suspension on additional tariffs, also postponing for 90 days the addition of certain U.S. firms to its trade and investment restriction lists.

“The United States continues to have discussions with the PRC to address the lack of trade reciprocity in our economic relationship and our resulting national and economic security concerns,” Trump’s order stated, referring to the People’s Republic of China.

The truce—originally set to expire on Tuesday—comes at a critical juncture, as U.S. retailers increase imports of electronics, apparel, and toys ahead of the Christmas season. The extension prevents U.S. tariffs on Chinese goods from soaring to 145% and Chinese tariffs on U.S. goods from climbing to 125%, levels that analysts warned would have amounted to a de facto trade embargo. Current rates will remain at 30% for Chinese imports into the U.S. and 10% for U.S. goods entering China.

In Beijing, the announcement was met with cautious optimism. “I don’t think either China or the United States wants to see their relationship continue to deteriorate,” said Wang Mingyue, a 39-year-old robotics professional. “But the game may not be over yet—there’s still risk.”

Financial markets responded positively, with Asian equities advancing and regional currencies holding steady. Trump told CNBC last week that the two nations were “very close” to a trade deal and suggested he would meet Chinese President Xi Jinping before year’s end if an agreement were finalized.

Talks Go Down to the Wire
The truce was first brokered in May following negotiations in Geneva, Switzerland, establishing a 90-day pause to allow further dialogue. Subsequent talks in Stockholm, Sweden, in late July led U.S. negotiators to recommend an extension. Treasury Secretary Scott Bessent noted that the triple-digit duties imposed in the spring were “untenable” and had effectively frozen trade between the world’s two largest economies.

“It wouldn’t be a Trump-style negotiation if it didn’t go right down to the wire,” said Kelly Ann Shaw, a former senior White House trade official, now with Akin Gump Strauss Hauer & Feld. She suggested Trump had likely pushed for last-minute concessions before agreeing to the extension.

Over the weekend, Trump urged China to quadruple its soybean purchases, though analysts questioned the feasibility of such a move. On Monday, he refrained from repeating the demand. Xu Tianchen, senior economist at the Economist Intelligence Unit, noted that Trump’s refusal to ease a 20% tariff linked to fentanyl concerns suggested both sides believed they could endure the trade standoff.

China’s exports to the U.S. dropped 21.7% year-on-year last month, while exports to Southeast Asia surged 16.6% as Chinese manufacturers sought alternative markets. U.S. trade data showed the American trade deficit with China falling to its lowest level in more than two decades in June.

Looking Ahead
Analysts believe a final agreement remains likely, given the deep interdependence of both economies. Ryan Majerus, a former U.S. trade official now with King & Spalding, said the extension would provide valuable breathing space.

“This will undoubtedly lower anxiety on both sides as talks continue and as the U.S. and China work toward a framework deal in the fall,” Majerus said.

Washington has also been pressing Beijing to curb purchases of Russian oil as part of its broader strategy to pressure Moscow over the war in Ukraine, with Trump warning of potential secondary tariffs should China fail to comply.