The US and China have prolonged their trade truce for an additional 90 days, just hours before the largest economies in the world were scheduled to implement higher tariffs on imports from each other.
On Monday, US President Donald Trump issued an executive order to maintain the pause until November 10, while Beijing also confirmed the extension.
This means that the US will keep its tariff on Chinese imports at 30%, whereas China will maintain a 10% duty on American products.
Earlier this year, Washington had threatened to impose tariffs as high as 145% on Chinese goods, and Beijing retaliated with tariffs of 125% on US shipments. The tariff rates for both nations were reduced following trade negotiations held in Geneva in May.
The recent extension will provide more time for additional discussions regarding "addressing trade imbalances" and "unfair trade practices," according to the White House.
It pointed out a trade deficit of nearly $300 billion (£223 billion) with China in 2024, which is the largest among any of its trading partners.
The negotiations will also seek to enhance access for US exporters to China and tackle national security and economic concerns, the statement added.
A representative from the Chinese embassy in Washington stated, "Cooperation that benefits both China and the United States is the correct approach; suppression and containment will lead to no positive outcomes."
China urged the US to remove its "unreasonable" trade restrictions, collaborate to benefit businesses on both sides, and maintain the stability of global semiconductor production.
Tariffs – taxes imposed on foreign goods, typically calculated as a percentage of the product’s value – have been a significant focus for Trump since he returned to the presidency in January.
He has consistently stated that tariffs will motivate US consumers to purchase more domestically produced goods, increase tax revenue, and encourage investment.
About his global trading partners, the US president has claimed that his country has been exploited by "cheaters" and "looted" by foreign entities.
A return to elevated tariffs would have posed further risks of trade disruption and uncertainty amid concerns over the impact of tariffs on both prices and the economy.
However, one US entrepreneur expressed to BBC Radio 4's Today programme that the extension simply prolonged the uncertainty.
"There is no way to plan for the future of my business," stated Beth Benike, the founder of Busy Baby.
"Since I have no clarity on what the final tariff will be, I lack control or understanding of the pricing strategy that will suit my business," she added.
Tensions between the US and China escalated dramatically in April when Trump introduced extensive new tariffs on goods from various countries, with China facing some of the highest rates.
In retaliation, Beijing imposed its own tariffs, initiating a back-and-forth conflict that resulted in tariffs soaring into triple digits and nearly halting trade between the two nations.
The two nations had reached an agreement in May to temporarily set aside some of those measures.
As a result of that agreement, Chinese products entering the US faced an additional 30% tariff compared to the beginning of the year, while US products were subject to a new 10% tariff in China.
Discussions continue between the two parties regarding matters such as access to China's rare earth materials, its purchases of Russian oil, and US restrictions on the export of advanced technologies, including chips to China.
Recently, Trump eased some export limitations, permitting companies like AMD and Nvidia to restart sales of specific chips to Chinese firms in exchange for a 15% revenue share with the US government.
This "unprecedented" deal has faced backlash, with some labeling it a "shakedown."
The US is also advocating for TikTok to be divested from its Chinese parent company ByteDance, a move that has met with opposition from Beijing.
On Monday, Trump spoke to reporters without committing to extending the temporary agreement, though he mentioned that discussions had been progressing "nicely." A day prior, he urged Beijing to boost its purchases of US soybeans.
Despite the pause in hostilities, trade exchanges between the two nations have been adversely affected this year, with US government statistics indicating that US imports of Chinese goods in June fell nearly 50% compared to June 2024.
In the first half of the year, the US imported $165 billion worth of products from China, a decrease of about 15% from the same period last year.
American exports to China declined by approximately 20% year-over-year during the same timeframe.
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