Trade Halted: US-China Prolong Tariff Ceasefire for Extra 90 Days
Following a series of negotiations over the summer, the United States and China have agreed to extend their tariff truce for an additional 90 days until November 10, 2025. This decision was announced on August 12, 2025, and aims to prevent disruptive tariff spikes during critical shipping and holiday seasons.
The extension maintains lower tariff rates rather than escalating them as previously planned. The U.S. has suspended 24 percentage points of the additional ad valorem duty on Chinese goods, keeping a 10% tariff rate during this period, while China has continued its tariff adjustments.
President Donald Trump signed an executive order on August 11 to formalize the extension, delaying the planned tariff hikes that could have pushed U.S. tariffs on Chinese imports up to 145% and retaliatory tariffs by China up to 125%. Both governments emphasize economic stability and are signaling readiness for further high-level talks, possibly including a future Trump–Xi summit.
The extension signals a cautious willingness from both sides to find common ground on disputes like intellectual property, subsidies, and market access. The pause protects U.S. retailers from disruptions as they stock seasonal inventory, and U.S. indices, including the S&P 500 and Nasdaq, also moved higher, buoyed by softer inflation data.
The underlying tensions between the U.S. and China persist despite the truce. Negotiations remain complex due to the juggling of domestic economic concerns and strategic competition by both sides. Treasury Secretary Scott Bessent and other officials have emphasized that the pause is temporary and have cautioned against complacency.
The tariff truce produced a wave of relief across global markets. European stock markets saw steady gains, led by positive investor sentiment. Asian equities rallied, with Japan's Nikkei and Australia's ASX 200 hitting new highs. Oil prices rose modestly, reflecting optimism about trade stability.
The extension of the truce comes after pragmatic, candid, and constructive meetings in London (June 9–10) and Stockholm (July 28–29, 2025). The Stockholm talks were described as optimistic for continued cooperation, though no final long-term agreement was reached. The extension aims to provide more time for ongoing discussions toward a broader trade deal.
China's retaliatory tariffs on U.S. products remain at 10% due to the extension. However, the underlying tensions between the two nations persist, with both sides continuing to juggle domestic economic concerns and strategic competition. The extension provides a critical negotiating time without immediate tariff threats, offering hope for a potential resolution in the near future.
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