DM Monitoring
WASHINGTON: The United States and China on Monday extended a tariff truce for another 90 days, staving off triple-digit duties on each other’s goods as US retailers get ready to ramp up inventories ahead of the critical end-of-year holiday season.
US President Donald Trump announced on his Truth Social platform that he had signed an executive order suspending the imposition of higher tariffs until 12:01 a.m. EST (0501 GMT) on November 10, with all other elements of the truce to remain in place.
China’s Commerce Ministry issued a parallel pause on extra tariffs early on Tuesday, also postponing for 90 days the addition of US firms it had targeted in April to trade and investment restriction lists.
“The United States continues to have discussions with the PRC to address the lack of trade reciprocity in our economic relationship and our resulting national and economic security concerns,” Trump’s executive order stated, using the acronym for the People’s Republic of China. “Through these discussions, the PRC continues to take significant steps toward remedying non-reciprocal trade arrangements and addressing the concerns of the United States relating to economic and national security matters.”
The tariff truce between Beijing and Washington had been due to expire on Tuesday at 12:01 a.m. EDT (0401 GMT). The extension until early November buys crucial time for the seasonal autumn surge of imports for the Christmas season, including electronics, apparel and toys at lower tariff rates.
The new order prevents US tariffs on Chinese goods from shooting up to 145%, while Chinese tariffs on US goods were set to hit 125% – rates that would have resulted in a virtual trade embargo between the two countries. It locks in place – at least for now – a 30% tariff on Chinese imports, with Chinese duties on US imports at 10%.
“We’ll see what happens,” Trump told a news conference earlier on Monday, highlighting what he called his good relationship with Chinese President Xi Jinping.
China said the extension was “a measure to further implement the important consensus reached by the two heads of state during their June 5 call,” and would provide stability to the global economy.
Trump told CNBC last week that the US and China were getting very close to a trade agreement and he would meet with Xi before the end of the year if a deal was struck.
“It’s positive news,” said Wendy Cutler, a former senior US trade official who is now a vice president at the Asia Society Policy Institute. “Combined with some of the de-escalatory steps both the United States and China have taken in recent weeks, it demonstrated that both sides are trying to see if they can reach some kind of a deal that would lay the groundwork for a Xi-Trump meeting this fall.”
