By PAUL WISEMAN and DIDI TANG
WASHINGTON (AP) — President Donald Trump prolonged a commerce truce with China for an additional 90 days Monday, a minimum of delaying as soon as once more a harmful showdown between the world’s two greatest economies.
The earlier deadline was set to run out at 12:01 a.m. Tuesday. Had that occurred the U.S. may have ratcheted up taxes on Chinese language imports from an already excessive 30%, and Beijing may have responded by elevating retaliatory levies on U.S. exports to China.
The pause buys time for the 2 international locations to work out a few of their variations, maybe clearing the best way for a summit later this yr between Trump and Chinese language President Xi Jinping, and it has been welcomed by the U.S. corporations doing enterprise with China.
Sean Stein, president of the U.S.-China Enterprise Council, mentioned the extension is “critical” to present the 2 governments time to barter a commerce settlement that U.S. companies hope would enhance their market entry in China and supply the understanding wanted for corporations to make medium- and long-term plans.
“Securing an agreement on fentanyl that leads to a reduction in U.S. tariffs and a rollback of China’s retaliatory measures is acutely needed to restart U.S. agriculture and energy exports,” Stein mentioned.
Reaching a pact with China stays unfinished enterprise for Trump, who has already upended the worldwide buying and selling system by slapping double-digit taxes – tariffs – on nearly each nation on earth.
The European Union, Japan and different buying and selling companions agreed to lopsided commerce offers with Trump, accepting as soon as unthinkably U.S. excessive tariffs (15% on Japanese and EU imports, as an example) to chase away one thing worse.
Trump’s commerce insurance policies have turned the USA from one of the open economies on the planet right into a protectionist fortress. The common U.S. tariff has gone from round 2.5% firstly of the yr to 18.6%, highest since 1933, in accordance with the Funds Lab at Yale College.
However China examined the boundaries of a U.S. commerce coverage constructed round utilizing tariffs as a cudgel to beat concessions out of buying and selling companions. Beijing had a cudgel of its personal: slicing off or slowing entry to its uncommon earths minerals and magnets – utilized in every little thing from electrical automobiles to jet engines.
In June, the 2 international locations reached an settlement to ease tensions. The US mentioned it might pull again export restrictions on pc chip know-how and ethane, a feedstock in petrochemical manufacturing. And China agreed to make it simpler for U.S. corporations to get entry to uncommon earths.
“The U.S. has realized it doesn’t have the higher hand,’’ mentioned Claire Reade, senior counsel at Arnold & Porter and former assistant U.S. commerce consultant for China affairs.
In Might, the U.S. and China had averted an financial disaster by lowering huge tariffs they’d slapped on one another’s merchandise, which had reached as excessive as 145% in opposition to China and 125% in opposition to the U.S.
These triple-digit tariffs threatened to successfully finish commerce between the USA and China and triggered a daunting sell-off in monetary markets. In a Might assembly in Geneva they agreed to again off and hold speaking: America’s tariffs went again right down to a still-high 30% and China’s to 10%.
Having demonstrated their capability to harm one another, they’ve been speaking ever since.
“By overestimating the ability of steep tariffs to induce economic concessions from China, the Trump administration has not only underscored the limits of unilateral U.S. leverage, but also given Beijing grounds for believing that it can indefinitely enjoy the upper hand in subsequent talks with Washington by threatening to curtail rare earth exports,” mentioned Ali Wyne, a specialist in U.S.-China relations on the Worldwide Disaster Group. “The administration’s desire for a trade détente stems from the self-inflicted consequences of its earlier hubris.”
It’s unclear whether or not Washington and Beijing can attain a grand cut price over America’s greatest grievances. Amongst these are lax Chinese language safety of mental property rights and Beijing’s subsidies and different industrial insurance policies that, the People say, give Chinese language corporations an unfair benefit in world markets and have contributed to an enormous U.S. commerce deficit with China of $262 billion final yr.
Reade doesn’t count on a lot past restricted agreements such because the Chinese language saying they’ll purchase extra American soybeans and promising to do extra to cease the circulation of chemical substances used to make fentanyl and to permit the continued circulation of rare-earth magnets.
However the more durable points will doubtless linger, and “the commerce conflict will proceed grinding forward for years into the longer term,’’ mentioned Jeff Moon, a former U.S. diplomat and commerce official who now runs the China Moon Methods consultancy.
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Related Press Workers Author Josh Boak contributed to this story.
Initially Revealed: August 11, 2025 at 6:02 PM PDT
