Trump Extends Tariff Truce with China Till November 2025
Further to the latest round of negotiations in Stockholm prior to the expiration of the initial tariff truce on 12 August 2024, USA and China agreed in principle to maintain the status quo, subject to the approval of the US President Donald Trump. Finally, on 11 August 2025, Trump signed an executive order to extend the truce by another 90 days until 10 November 2025.
During the truce, the #tariffs will thus remain unchanged. That is, US will charge 30% on Chinese goods, whereas China will charge 10% on American goods. The principal purported concern of the US is the huge trade deficit with China, approaching USD 300 billion in 2024.
Trump first put into practice his tariff tactics in April 2025 and called it the Liberation Day for America. As a consequence, figures for 1H25 showed that bilateral US-China trade dropped 17% year-on-year. Imports from China fell by 15%, while exports to China dropped by 20%.
On the other hand, the US has relaxed restrictions on exports to China of certain #AI chips made by Nvidia and AMD in the USA, but slapped on an additional 15% tax. However, the Chinese government has issued a statement urging Chinese firms to support local companies.
President Trump exhorted Beijing to purchase more US soybeans in order to decrease the trade imbalance. Trump also initially stopped issuing visas to Chinese students to come to study in the USA, but that was later relaxed. However, the move deterred many Chinese students who are now considering other options. In turn, Beijing has reopened its sale of rare earths magnets to the US, but at a lower volume than last year.
Another friction point is China’s support for Russia. China has become one of the largest purchaser of oil and gas from Russia despite calls for sanctions by the West. Other bones of contention include the purchase of TikTok and the seaports at both ends of the Panama Canal for ‘security reasons’.
The Communist Party of China (CPC) has indicated that it will be holding its 4th Plenum in October 2025. It is expected that key personnel change and the 15th Five-Year Economic Plan will be made public then. Thus, the extension appears to have taken this into account by extending the truce until November 2025.