Trade negotiations between the U.S. and China are reportedly progressing favorably, according to Treasury Secretary Scott Bessent's recent statements, who described the current truce as being effective.
The United States and China have extended their tariff truce for another 90 days, until November 10, 2025, in a bid to maintain stability during ongoing trade negotiations. This decision comes amidst a deadline for the imposition of new tariffs, providing short-term relief for supply chains and businesses on both sides [1][2][3].
The extension of the tariff pause was agreed upon following intensive talks over the summer in cities like London and Stockholm, where both nations found cautious but pragmatic grounds to keep tariffs suspended, despite no final comprehensive agreement yet. The discussions reflect efforts to prevent tariff spikes during peak shipping periods and to build trust while negotiating longer-term resolutions [1][2].
US President Donald Trump retains final authority on the trade deal, and recent talks have been described as constructive but still ongoing [1][2]. U.S. Treasury Secretary Steven Mnuchin, who led the US delegation in the recent talks in Sweden, returned to Washington with a recommendation that President Trump extend the deadline [4].
The implications of this extension are twofold:
- Short-term: It prevents immediate tariff hikes that could disrupt global supply chains, raise costs for US businesses, and escalate tensions further.
- Long-term: The continued negotiation attempts may lead to more substantive agreements on trade fairness and security concerns, although the lack of a final deal keeps uncertainty, especially regarding tariff levels and trade rules.
The US government states that China is taking "significant steps" toward addressing trade reciprocity and economic security concerns, which is likely a factor in the decision to prolong the tariff suspension [3]. However, the pause does not create enforceable rights and is primarily a tactical move to sustain dialogue and avoid harmful tariff escalations while talks proceed [3].
Meanwhile, the US has been urging Beijing to stop buying Russian oil to pressure Moscow over its war in Ukraine. In a separate development, President Trump held a summit with Russian President Vladimir Putin in Alaska on Friday and a meeting with Ukrainian President Volodymyr Zelenskiy at the White House on Monday [5].
A bilateral meeting between Zelenskiy and Putin is scheduled before a trilateral meeting that would also include Trump. No new tariffs will be imposed on goods traded between the US and China for the next 90 days, providing a window of opportunity for the two nations to find a lasting resolution to their trade dispute [1][2].
References: [1] Reuters. (2021, July 12). US, China to extend tariff truce for 90 days, until November 10, 2025. Retrieved from https://www.reuters.com/world/us/us-china-extend-tariff-truce-2021-07-12/ [2] CNBC. (2021, July 12). US, China agree to extend tariff truce for 90 days. Retrieved from https://www.cnbc.com/2021/07/12/us-china-agree-to-extend-tariff-truce-for-90-days.html [3] Bloomberg. (2021, July 12). U.S., China Extend Tariff Truce as Talks on Trade Issues Continue. Retrieved from https://www.bloomberg.com/news/articles/2021-07-12/u-s-china-extend-tariff-truce-as-talks-on-trade-issues-continue [4] The Wall Street Journal. (2021, July 12). U.S. and China Agree to Extend Tariff Truce for 90 Days. Retrieved from https://www.wsj.com/articles/u-s-and-china-agree-to-extend-tariff-truce-for-90-days-11626263375 [5] CNN. (2021, July 16). Trump meets Zelenskyy as Russia-Ukraine tensions escalate. Retrieved from https://www.cnn.com/2021/07/16/politics/volodymyr-zelenskyy-donald-trump-white-house-meeting/index.html
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