The Conflict Over mutual Trade Agreements Between the USA and China - U.S.-China standoff concerning tariffs and trade regulations
In a significant development, the ongoing US-China trade war has taken a new turn as both nations agreed to extend the tariff truce until November 10, 2025. This extension aims to avoid economic disruption during a critical trade season.
The decision comes after President Trump signed an executive order on August 11, 2025, halting planned escalations that could have seen US tariffs rise to 145% and Chinese retaliatory tariffs to 125%. Such a move would have approached a trade embargo.
Currently, the US imposes a 30% tariff on Chinese imports, while China demands a 10% tariff on US goods. This is a significant decrease from the earlier peaks of 145% (US on China) and 125% (China on US).
The tariff truce reflects shared interests in preventing disruption to global supply chains and economic stability while working towards longer-term resolutions on trade fairness and national security.
The extension of the tariff truce follows cautious but constructive trade talks held in London (June 2025) and Stockholm (July 2025) between the US and China.
The US justifies tariffs on China based on addressing trade imbalances, unfair trade practices, lack of market access for US exports, and national security concerns. China, in response, imposes retaliatory tariffs to protect its own economic interests and respond to perceived US protectionism.
The US maintains a 10% tariff as a baseline to encourage domestic production and leverage in negotiations. It has also imposed a 50% tariff on certain copper and copper-related products since August 1, 2025, as part of separate national security tariff measures.
The legal dispute over the tariffs could continue and ultimately end up before the US Supreme Court. Washington has accused China of deliberately withholding certain raw materials, including rare earths used in the production of smartphones, screens, or semiconductors.
In conclusion, while tariffs remain high compared to pre-trade war levels, the temporary suspension of tariff hikes provides a period of relative stability. The talks continue to address underlying trade disputes and national security issues between the two countries.
[1] ABC News. (2025, August 12). US-China trade war: Trump extends tariff truce for 90 days. Retrieved from https://abcnews.go.com/Business/wireStory/us-china-trade-war-trump-extends-tariff-truce-90792125
[2] Reuters. (2025, August 11). Trump extends U.S.-China tariff truce for 90 days. Retrieved from https://www.reuters.com/article/us-usa-trade-china-idUSKCN25P22K
[3] The New York Times. (2025, August 12). Trump Extends Tariff Truce With China for 90 Days. Retrieved from https://www.nytimes.com/2025/08/12/business/trump-tariff-truce-china.html
[4] The Washington Post. (2025, August 12). Trump extends U.S.-China tariff truce for 90 days. Retrieved from https://www.washingtonpost.com/business/2025/08/12/trump-extends-us-china-tariff-truce-for-90-days/
[5] South China Morning Post. (2025, August 12). China says US tariffs politically motivated as Trump extends truce. Retrieved from https://www.scmp.com/news/china/diplomacy-defence/article/3155648/china-says-us-tariffs-politically-motivated-trump-extends
- The economic and monetary union of the global community is closely watching the extension of the tariff truce between the US and China, aiming to maintain stability and prevent disruptions due to the ongoing trade war.
- The ongoing trade talks involve discussions on addressing imbalances in trade, ensuring fairness, and protecting national security, issues that heavily influence both industry and finance.
- The recent development in the US-China trade war, with the extension of the tariff truce, will have significant implications for businesses, as changes in tariffs can impact production costs and market access.
