Introduction
The clock was ticking, markets were nervous, and then just hours before a fresh wave of tariffs was set to hit the US–China trade truce got a lifeline. On Monday, President Donald Trump signed an executive order to extend the pause for another 90 days, while Beijing confirmed its own extension. In a year already full of economic curveballs, this move might just keep global trade from spiraling into another tariff war… for now.
What’s in the New Extension?
The agreement keeps things exactly where they are for the moment:
- US tariffs on Chinese imports stay at 30%.
- China’s tariffs on American goods remain at 10%.
This comes after months of back-and-forth that saw tariff threats as high as 145% from Washington and 125% from Beijing earlier in 2025. Thanks to talks in Geneva back in May, those extremes were dialed down but tensions never fully cooled.
“Win-win cooperation between China and the United States is the right path; suppression and containment will lead nowhere,” a Chinese embassy spokesperson told reporters in Washington.
Why It Matters Now
The extension isn’t just about numbers on a customs form it’s about breathing space in a politically charged trade climate.
Here’s why it’s a big deal:
- Avoids Immediate Economic Shock – A tariff spike could have hit both economies hard, pushing up prices for everything from electronics to soybeans.
- Buys Time for Negotiations – Talks will continue over trade imbalances, tech restrictions, and market access.
- Keeps Global Supply Chains Steadier – For industries like semiconductors, even a short-term reprieve helps maintain production stability.
The Stakes for Businesses
While the pause is a relief for some, it’s also keeping business owners in limbo.
Beth Benike, founder of Busy Baby, summed it up well:
“There’s no way to plan for the future of the business. I have no idea what the tariff is actually going to end up being.”
For US exporters, the extension is a chance to push for more access to Chinese markets. For Chinese suppliers, it’s about keeping relationships with American buyers intact.
The Bigger Picture
This truce isn’t happening in a vacuum. Other sticking points remain:
- Rare Earths – China’s dominance in critical minerals is still under discussion.
- Technology Sales – The US has partially lifted restrictions, allowing firms like AMD and Nvidia to sell certain chips but only if they share 15% of revenue with the US government.
- TikTok’s Ownership – Washington still wants it spun off from ByteDance, which Beijing opposes.
Meanwhile, trade data shows the damage already done:
- US imports from China in June 2025 – down nearly 50% from June 2024.
- First half of 2025 US imports from China – $165bn, down 15% year-on-year.
- US exports to China – down about 20% in the same period.
Looking Ahead: Will 90 Days Be Enough?
Ninety days can feel like a lifetime in politics or the blink of an eye in global trade. If both sides play ball, this could pave the way for a longer-term agreement. If not, November could bring another round of tit-for-tat tariffs, and the global economy might feel the aftershocks well into 2026.
The US–China trade truce extension is a welcome pause in an otherwise tense economic standoff. But like a holiday extension on your bills, it doesn’t erase the debt it just buys time. For now, the world will be watching every meeting, handshake, and headline that comes out of the next three months of negotiations.
