Trump extends US' trade truce with China by 90 days

US President Donald Trump has extended the trade truce with China, which earlier had put on hold most of their recent tariffs and established a 90-day truce in the trade war, by another 90 days. This has once again delayed a showdown between the world’s two biggest economies.

Trump extended the trade truce with China on Monday (August 11), announcing in a post on Truth Social that “all other elements of the agreement will remain the same.”

The previous trade truce between the US and China was set to expire at 12.01 am on Tuesday. If that took place, then the US could have slapped higher tariffs on Chinese imports from an already high 30 per cent, and Beijing could have retaliated by slapping its own tariffs on US exports to China.

Also Read: Trump says US tariffs on India deal 'big blow' to Russia

Buys both sides more time

The extension of the trade truce has provided the two countries with more time to work out trade-related differences and perhaps clear the way for a summit later this year between Trump and Chinese President Xi Jinping, and it has been welcomed by the U.S. companies doing business with China.

Sean Stein, president of the U.S.-China Business Council, said the extension is “critical” to give the two governments time to negotiate a trade agreement that US businesses hope would improve their market access in China and provide the certainty needed for companies to make medium- and long-term plans.

“Securing an agreement on fentanyl that leads to a reduction in US tariffs and a rollback of China’s retaliatory measures is acutely needed to restart US agriculture and energy exports,” Mr. Stein said.

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Trump’s tariff spree

Reaching a pact with China remains unfinished business for Trump, who has already upended the global trading system by slapping double-digit taxes –tariffs-on almost every country on earth.

The European Union, Japan and other trading partners agreed to lopsided trade deals with Trump, accepting once-unthinkable U.S. high tariffs (15%) on Japanese and EU imports, for instance. to ward off something worse.

But China tested the limits of a U.S. trade policy built around using tariffs as a cudgel to beat concessions out of trading partners. Beijing had a cudgel of its own: cutting off or slowing access to its rare earths minerals and magnets - used in everything from electric vehicles to jet engines.

Also Read: Trump thinking about tariffs on China, says US Vice President JD Vance

What JD Vance said

Trump’s decision comes days after US Vice President J.D. Vance indicated that the President was “thinking about” imposing tariffs on China for purchasing Russian oil, but has not reached a firm decision.

In an interview on Fox News, Vance noted that U.S. relations with China are “more complicated” due to the breadth of issues beyond Russia. His remarks follow Trump’s August 6 decision to raise U.S. duties on Indian imports by an additional 25 per cent, bringing total tariffs to 50% in response to New Delhi’s continued purchases of Russian crude oil. India denounced the move as “unfair, unjustified and unreasonable” and vowed to protect its national interests.

Also Read: US tariffs: Will India fight back? | Richard Kozul-Wright interview

Ex-US NSA’s warning

Former National Security Adviser John Bolton had earlier criticised the disparate treatment of India and China, warning that steep U.S. tariffs on India could push it closer to Moscow and Beijing.

Bolton had said that exempting China from similar penalties undermines U.S. strategic efforts to draw India away from Russia and deters cooperation against Chinese regional ambitions.

He cautioned that India, Russia, and China might align in opposition to U.S. economic measures, turning Washington’s bid to punish Moscow into a catalyst for a trilateral bloc resisting American pressure.

(With agency inputs)