Former US president Donald Trump has signed a 90-day extension to the trade truce with China, maintaining a pause on escalating tariffs as negotiators seek to resolve long-standing disputes over market access, technology transfer, and intellectual property. The current tariff rate on Chinese imports remains at 145%, one of the highest in modern US trade history.
Maintaining pressure while avoiding escalation
The agreement, announced late on Monday, allows both sides more time to address core issues that have strained US-China trade relations for years. Trump framed the extension as “a chance for China to show they are serious about fair trade” while stressing that tariffs would remain in place to preserve US leverage. Chinese officials welcomed the pause but urged Washington to reduce tariffs, which they say harm global supply chains.
Economic stakes and market reaction
The 145% tariff rate has significantly affected import costs, particularly in sectors such as electronics, machinery, and consumer goods. Analysts note that while the extension avoids immediate disruption, it leaves businesses uncertain about long-term conditions. US markets responded with modest gains, while Asian equities rose on hopes that talks could eventually lead to a broader easing of trade tensions.
Negotiations and sticking points
Talks are expected to focus on intellectual property protections, agricultural purchases, and measures to prevent forced technology transfers. However, key disagreements remain over subsidy practices and China’s industrial policy, with US negotiators insisting on binding enforcement mechanisms. Some observers caution that without concrete progress, the truce could simply delay another escalation in tariffs.
Looking ahead
The extension expires in mid-November, by which time both governments will need to decide whether to formalise a longer-term deal or risk reigniting a trade war. Business groups on both sides have urged a sustainable resolution, warning that prolonged uncertainty could deter investment and slow economic growth. For now, the extension keeps the door open for diplomacy while preserving the hard-line measures that have defined Trump’s trade strategy.
REFH – Newshub, 12 August 2025
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