US-China Agree to Extend Trade Truce for Another 90 Days Amid Ongoing Negotiations

China Urges US to Abandon ‘Suppression’ as Trade Truce Holds,But Flows Plummet

Washington D.C. – As a temporary truce on escalating tariffs between the United States and China remains in place, Beijing has issued a strong statement advocating for cooperative trade relations, warning that attempts at containment will prove fruitless. The Chinese embassy in Washington emphasized that “win-win cooperation” is the only viable path forward, while together calling on the US to remove what it deems “unreasonable” trade restrictions.

The statement comes amid ongoing discussions between the two economic superpowers, covering a range of contentious issues including ChinaS access to rare earth minerals, its continued purchases of Russian oil, and US restrictions on the export of advanced technologies – notably semiconductors – to China.

The current truce, agreed upon in May, prevents a return to the full-scale trade war that peaked under the Trump administration.A resurgence of higher duties would have injected further instability into the global economy, exacerbating existing concerns about the impact of tariffs on consumer prices.

However, despite the pause in tariff escalation, trade between the US and China is demonstrably slowing. Recent US government figures reveal a significant downturn in imports and exports. US imports of Chinese goods in June were nearly halved compared to the same period last year, and US imports from China in the first half of 2024 totaled $165 billion – a 15% decrease year-over-year. American exports to China experienced an even steeper decline, falling approximately 20% over the same timeframe.

A History of Escalation & Limited Concessions

The current situation represents a fragile détente following a period of intense trade conflict. In April, former President Trump initiated sweeping new tariffs on goods globally, with China bearing a disproportionate burden. Beijing swiftly retaliated with its own tariffs, triggering a tit-for-tat escalation that threatened to cripple international trade.

While the May agreement offered a temporary reprieve, it still left Chinese goods entering the US subject to an additional 30% tariff, and US goods facing a 10% tariff in China.

Recent Developments & Ongoing Disputes

Recent moves by the Trump administration to relax some export restrictions, allowing companies like AMD and Nvidia to resume sales of certain chips to chinese firms – in exchange for a 15% revenue share with the US government – signal a potential shift in strategy.

However, significant disagreements remain. The US continues to push for the separation of TikTok from its Chinese parent company, ByteDance, a demand vehemently opposed by Beijing.

Speaking to reporters earlier Monday,Trump indicated that dealings with China were progressing “nicely,” while also urging Beijing to increase its purchases of US soybeans.

the Broader Implications: decoupling & Global Supply Chains

The ongoing trade tensions between the US and China are not simply about tariffs; they represent a broader strategic competition with implications for the global economy. The push for “decoupling” – reducing economic interdependence – is reshaping global supply chains and forcing businesses to reassess their reliance on both countries.

the semiconductor industry, in particular, is at the heart of this competition. the US is actively seeking to bolster its domestic chip production and limit China’s access to advanced semiconductor technology,fearing its potential use for military applications.

The future of US-China trade relations remains uncertain. While a full-blown trade war has been averted for now, the underlying issues remain unresolved, and the risk of further escalation persists.The current slowdown in trade flows underscores the significant economic costs of ongoing tensions and the urgent need for a more sustainable and cooperative approach.

How might the 90-day extension of the US-China trade truce influence businesses’ supply chain diversification strategies?

The latest Extension: A Pause in the Trade War

The United states and China have once again agreed to extend their existing trade truce for another 90 days, as of August 12, 2025.This extension, confirmed by officials from both nations, provides a temporary reprieve in the ongoing trade dispute that has impacted global markets and supply chains for several years.The agreement centers around delaying the implementation of further tariffs and continuing negotiations aimed at resolving key trade imbalances and intellectual property concerns. This marks the latest advancement in US-China trade relations, a complex and evolving situation.

Key Terms of the Extended Truce

While details remain somewhat limited, the core components of the 90-day extension include:

Tariff Suspension: Both the US and China will refrain from imposing new tariffs on each other’s goods during the extension period. This prevents further escalation of the trade war.

continued Negotiations: High-level talks will continue,focusing on areas of disagreement such as:

Intellectual Property Theft: US concerns regarding the protection of American intellectual property in China.

Forced Technology Transfer: Allegations that China pressures foreign companies to transfer technology in exchange for market access.

Trade Imbalances: The meaningful trade deficit the US has with China.

Market Access: Expanding access for US companies to the Chinese market.

Monitoring and Enforcement: Mechanisms for monitoring compliance with existing agreements and enforcing any future commitments. This is a crucial aspect of the US-China trade deal.

Impact on Global Markets & Industries

The extension provides a degree of stability to global markets, which have been sensitive to developments in the US-China trade relationship. Several industries are particularly affected:

Agriculture: US farmers,heavily reliant on chinese markets for soybeans and other agricultural products,benefit from continued access. The initial trade war considerably impacted agricultural exports.

Technology: The tech sector, facing restrictions on components and market access, sees a temporary easing of tensions.Concerns around semiconductor trade remain a key focus.

Manufacturing: Manufacturers reliant on Chinese supply chains or exporting to China experience reduced uncertainty. Supply chain resilience is a major consideration.

Retail: Consumers may see a continued pause in price increases on imported goods, even though the long-term impact depends on the outcome of negotiations.

Historical Context: A Timeline of the Trade War

understanding the history of the US-China trade dispute is crucial for interpreting the current situation. Here’s a brief timeline:

1. 2018: The US begins imposing tariffs on Chinese goods, citing unfair trade practices. China retaliates with tariffs on US products.
2. 2019: Negotiations stall,and further tariffs are implemented. A “Phase One” trade deal is signed in January 2020, offering limited tariff reductions.
3. 2020-2022: The COVID-19 pandemic and geopolitical tensions complicate trade relations.
4. 2023-2025: Multiple extensions of temporary truces and ongoing negotiations, with limited breakthroughs. the current extension represents the latest attempt to de-escalate tensions.

Potential Outcomes & Future Scenarios

Several potential outcomes could emerge from the ongoing negotiations:

Complete Agreement: A broad agreement addressing all key issues, including intellectual property, market access, and trade imbalances. This is the most optimistic scenario.

limited Deal: A narrower agreement focusing on specific areas of cooperation, such as agricultural trade.

Continued Truce Extensions: Repeated 90-day extensions without significant progress, maintaining the status quo.

Escalation of Trade War: A breakdown in negotiations leading to the imposition of further tariffs and potentially broader trade restrictions. This is the most pessimistic scenario.

Benefits of the 90-Day Extension

The extension offers several immediate benefits:

Reduced Uncertainty: Provides businesses with a temporary period of stability for planning and investment.

Avoidance of Further Tariff Hikes: Prevents additional costs for consumers and businesses.

opportunity for Dialog: Allows for continued negotiations and potential progress towards a resolution.

Stabilized Markets: Contributes to calmer financial markets.

Practical Tips for Businesses

Businesses impacted by the US-china trade relationship should consider the following:

diversify Supply Chains: Reduce reliance on single sources of supply. Explore choice suppliers in other countries.

Monitor Tariff Changes: Stay informed about any changes to tariff rates and regulations.

Assess Risk Exposure: Evaluate the potential impact of trade disruptions on your business.

Engage with Industry Associations: Participate in industry groups advocating for favorable trade policies.

Seek Expert Advice: Consult with trade lawyers and consultants to navigate the complex trade landscape.