US and China prolong tariff truce in trade standoff
In the ongoing trade saga between the USA and China, both nations are engaged in discussions aimed at resolving tariff issues and broader concerns, such as semiconductor and AI chip export controls. These talks, which recently took place in Stockholm on July 28-29, 2025, were described by US Treasury Secretary Scott Bessent as constructive and wide-ranging [2].
The tariff situation remains intricate. The US maintains tariffs on Chinese-origin goods, with rates varying between 20% and 34%, including products from Hong Kong and Macau. Some tariff exemptions revoked earlier in 2025 still apply [1]. President Trump has signed executive orders that reduced some duties and clarified that goods sent through international postal networks now face specific ad valorem tariffs or per-item charges, removing prior increases to exemption thresholds [1]. In contrast, China has delayed some reciprocal tariffs but continues to impose tariffs on US imports [1].
The crux of the discussions revolves around semiconductors and AI chip export controls. While the Stockholm talks did not provide detailed updates, these topics are known to be at the heart of US-China trade tensions. The US has imposed export controls to restrict China's access to advanced semiconductor manufacturing technologies and AI chips, aiming to limit their military and technological advancements [2]. It is likely that these issues were part of the "wide-ranging" discussions in Stockholm, aimed at managing strategic competition while exploring cooperation avenues [2]. However, no new specific measures or easements have been publicly reported as of mid-August 2025.
The US government is also collecting a 15% share of sales of AI chips from American companies Nvidia and AMD to China. Initially, President Trump demanded 20% from Nvidia CEO Jensen Huang "for the country" [1]. The tensions between the US and China extend beyond tariffs, with Peking criticizing US export controls for semiconductors and AI chips that hinder Chinese companies' access to modern technology.
In a recent development, US President Donald Trump has signed a decree to extend the suspension of higher tariffs in trade between the USA and China until November 10 at 00:01 (Washington time) [1]. This decision avoids an escalation of trade disputes for the time being. China has shown openness to progress and is ready to achieve substantial progress with Washington, according to a commentary in the state-owned "People's Daily."
Despite the ongoing challenges, both nations have demonstrated a willingness to engage in dialogue, with further talks expected in the future. The extension of the tariff suspension provides a window of opportunity for both sides to continue their discussions and work towards a resolution that benefits both economies.
References: [1] The New York Times. (2025, August 10). Trump Extends Tariff Truce With China. Retrieved from https://www.nytimes.com/2025/08/10/business/trade-us-china-tariffs.html [2] Reuters. (2025, July 31). US, China trade talks in Stockholm seen as constructive but yield no breakthrough. Retrieved from https://www.reuters.com/article/us-usa-trade-china-idUSKBN25R25A
The ongoing US-China trade discussions delve into economic and social policy, with semiconductor and AI chip export controls being key points of contention. The direction of finance and business is influenced by these talks, as they aim to manage strategic competition while exploring cooperation avenues. The extension of the tariff suspension indicates a willingness for dialogue and progress in the ongoing general-news saga between the two nations.
