Trump Extends U.S.-China Trade Truce for 90 Days Amid Ongoing Negotiations

On August 12, 2025, President Donald Trump signed an executive order extending the trade truce with China for an additional 90 days, maintaining existing tariffs at 30% on Chinese imports and 10% on U.S. exports to China. This extension, confirmed by both the U.S. and Chinese governments, aims to provide additional time for negotiations on unresolved issues such as intellectual property rights, industrial subsidies, and China's role in fentanyl production. The decision was welcomed by U.S. businesses seeking stability and market access in China. Financial markets responded positively, with Asian stock indices reaching record highs following the announcement.

The U.S.-China trade relationship has been marked by escalating tariffs and retaliatory measures. In early 2025, the U.S. imposed a 145% tariff on Chinese goods, while China responded with a 125% tariff on American goods. These measures were part of broader efforts by the Trump administration to address concerns over trade imbalances, intellectual property theft, and national security issues.

The extension lasts for 90 days, maintaining the current tariff levels of 30% on Chinese imports and 10% on U.S. exports to China. The extension provides additional time to address unresolved issues, including intellectual property rights, industrial subsidies, and China's role in fentanyl production. Both the U.S. and Chinese governments have confirmed the extension, signaling a mutual commitment to continued negotiations.

U.S. businesses, particularly those with significant exposure to Chinese markets, have welcomed the extension as it provides temporary stability and continued market access. Global markets reacted positively to the news. Japanese stocks reached all-time highs, and other regional markets experienced gains. The truce postpones the implementation of new tariffs, easing some of the uncertainty that had been affecting investor sentiment.

The extension comes amid legal challenges to the administration's tariff policies. On May 28, 2025, the United States Court of International Trade ruled that the "Liberation Day" tariffs imposed by President Trump exceeded the authority granted under the International Emergency Economic Powers Act (IEEPA). The court issued a permanent injunction against the enforcement of these tariffs. However, the tariffs remain in effect pending the administration's appeal.

This is not the first time the U.S. and China have agreed to a trade truce. Previous agreements have provided temporary relief but have often been followed by renewed tensions and escalations. The current extension is notable for its focus on specific issues such as intellectual property rights and fentanyl production, indicating a more targeted approach to resolving longstanding disputes.

The extension of the trade truce between the U.S. and China provides a temporary reprieve in the ongoing trade tensions, offering both nations an opportunity to address critical issues and work towards a more stable economic relationship. The coming months will be crucial in determining whether this extension leads to substantive agreements or merely postpones further conflicts.