President Donald Trump announced the extension of the U.S.-China trade truce for an additional 90 days, preventing an immediate escalation in tariffs between the two largest global economies.
The extension was formalized by an executive order signed by Trump and shared on his Truth Social platform, ensuring that all previous terms of the agreement remain unchanged.
Driving the news: The previous truce deadline was set to expire at 12:01 a.m. Tuesday, which could have triggered increased tariffs by the U.S. on Chinese imports from an already substantial 30%, and potential retaliatory tariffs by Beijing on American exports.
The big picture: This extension buys crucial time for negotiation aimed at resolving outstanding issues in U.S.-China trade relations and potentially setting the stage for a summit later this year between Trump and Chinese President Xi Jinping.
- Trump’s trade policies have significantly altered the global trading system, having imposed double-digit tariffs on a wide range of countries and goods, transforming the U.S. economy into a more protectionist environment.
- Average U.S. tariffs have surged from around 2.5% early in the year to 18.6%, marking the highest U.S. tariff level since 1933, according to the Budget Lab at Yale University.
- China responded to these tariffs by leveraging its control over critical rare earth minerals and magnets — key components in advanced technologies such as electric vehicles and jet engines — as a countermeasure against U.S. trade restrictions.
- In June, the two countries reached a partial agreement easing tensions: the U.S. agreed to relax export restrictions on computer chip technology and ethane, while China committed to allow easier U.S. firm access to rare earth materials.
