The United States and China have agreed to extend their tariff truce for another 90 days, preventing major increases in import taxes that could have severely hurt trade between the two countries.
This move comes as US retailers prepare for the busy holiday shopping season later this year.
President Donald Trump announced on his Truth Social platform that he signed an executive order delaying the start of higher tariffs until November 10.
This means the current tariffs will remain in place, and the planned jump to much higher rates is paused.
China's Commerce Ministry followed by suspending additional tariffs and postponing trade restrictions on US companies for the same 90-day period.
According to Reuters, the agreement stops US tariffs on Chinese goods from rising to 145%, and Chinese tariffs on American products from reaching 125%.
Instead, US tariffs stay at 30% for Chinese imports, while China keeps a 10% duty on US goods.
Had the tariffs increased as planned, it would have caused a near trade shutdown between the world's two largest economies.
For all the PANICANS ! Calm down ! Trump just extended China Tarrifs another 90 days ! RELAX PEOPLE pic.twitter.com/yDe1xROW2L
— April Silverman (@CaliMAGABarbie) August 12, 2025
Beijing Worker Sees Hope but Cautions on US-China Trade Tensions
"This extension buys crucial time for the seasonal surge of imports ahead of the Christmas season," said a market analyst.
Products like electronics, toys, and clothing can continue to be sold at lower tariff rates, helping keep prices more stable for shoppers.
Many in China welcomed the extension. Wang Mingyue, a robotics worker in Beijing, said, "I don't think either China or the United States wants their relationship to get worse. This shows both sides are trying to work things out, but the tension is still there."
Despite the truce, President Trump recently asked China to quadruple its purchases of American soybeans, though it's unclear if China agreed, CNA said.
Trade experts say these talks are complicated, with both countries seeking more benefits before agreeing on a deal.
Treasury Secretary Scott Bessent called the triple-digit tariffs "untenable," saying they had almost stopped trade between the two nations. Now, both sides have more time to find a lasting solution.
"This extension will lower anxiety and give more time to work through trade issues," said Ryan Majerus, a former US trade official.
The ongoing negotiations also touch on other concerns, such as US pressure on China to stop buying Russian oil amid the Ukraine conflict.
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