U.S. and China Hit Pause on Trade War — Again — With 90-Day Truce

 

The world’s two largest economies have stepped back from the brink — at least for now. On Monday, President Donald Trump announced a 90-day extension to the U.S.-China trade truce, avoiding what could have been another explosive round of tariffs. Beijing followed suit, confirming the pause through its Ministry of Commerce.

The previous deadline was set for just after midnight Tuesday. Without the extension, U.S. tariffs on Chinese imports could have climbed from 30% to even higher levels, triggering equally painful retaliatory taxes from Beijing on American exports.

Trump said “all other elements” of the existing agreement will remain unchanged, buying both sides more time to hammer out a deal. The move has been welcomed by U.S. companies heavily tied to Chinese markets. Sean Stein of the U.S.-China Business Council called the reprieve “critical” for negotiations on issues like market access, agricultural exports, and fentanyl-related trade restrictions.

China also offered a sweetener, announcing it would temporarily lift restrictions on some U.S. companies previously targeted by export bans and its “unreliable entities” list.

This latest pause is part of a turbulent saga that has seen tariffs soar to levels not seen since the Great Depression. At the start of the year, the average U.S. tariff was just 2.5%. Today, it sits at 18.6%, according to Yale University’s Budget Lab. China has countered by threatening to restrict exports of rare earth minerals vital to everything from electric vehicles to military jets.

Earlier flashpoints nearly brought trade between the two giants to a standstill, with tit-for-tat tariffs topping 145% against China and 125% against the U.S. That standoff spooked global markets and forced both sides into talks. Since then, limited deals — like easing rare earth restrictions and scaling back curbs on U.S. chip exports — have kept the conversation alive.

Still, the big issues remain unresolved: U.S. demands for better intellectual property protections, an end to Beijing’s heavy industrial subsidies, and a shrinking of the $262 billion trade deficit. Experts say those fights are far from over.

“Don’t expect a grand bargain,” warned trade analyst Jeff Moon. “We’ll see small agreements here and there, but the trade war will keep grinding on for years.”

For now, Washington and Beijing have traded blows, tested each other’s limits — and decided to keep talking. But as history has shown, the clock on this truce is already ticking.