WASHINGTON: U.S. President Donald Trump has signed an executive order extending a tariff truce with China by another 90 days, a White House official said on Monday with only hours to go before U.S. tariffs on Chinese goods were due to snap back to triple-digit rates.
The order followed a noncommittal answer by Trump to reporters as to whether he would extend the lower tariff rates a day after he urged Beijing to quadruple its purchases of U.S. soybeans.
A tariff truce between Beijing and Washington was set to expire on Tuesday at 00:01 ET (04:01 GMT). The order prevents U.S. tariffs on Chinese goods from shooting up to 145%, with Chinese tariffs on U.S. goods set to hit 125%, rates that would have resulted in a virtual trade embargo.
“We’ll see what happens,“ Trump told a press conference, when asked how he planned to extend the deadline. “They’ve been dealing quite nicely. The relationship is very good with President Xi (Jinping) and myself.”
Imports from China are currently subject to 30% tariffs, including a 10% base rate and 20% in fentanyl-related tariffs imposed by Washington in February and March. China had matched the de-escalation, lowering its rate on U.S. imports to 10%.
The two sides in May announced a truce in their trade dispute after talks in Geneva, Switzerland, agreeing to a 90-day period to allow further talks. They met again in Stockholm, Sweden in late July, but did not announce an agreement to further extend the deadline.
Kelly Ann Shaw, a senior White House trade official during Trump’s first term and now with Akin Gump Strauss Hauer & Feld, said she expected Trump to extend the 90-day “tariff détente” for another 90 days later on Monday.
“It wouldn’t be a Trump-style negotiation if it didn’t go right down to the wire,“ she said, adding Trump could also announce progress in other aspects of the economic relationship as a backdrop for granting the extension.
“The whole reason for the 90-day pause in the first place was to lay the groundwork for broader negotiations and there’s been a lot of noise about everything from soybeans to export controls to excess capacity over the weekend,“ she said.
Ryan Majerus, a former U.S. trade official now with the King & Spalding law firm, welcomed the news.
“This will undoubtedly lower anxiety on both sides as talks continue, and as the U.S. and China work toward a framework deal in the fall. I’m certain investment commitments will factor into any potential deal, and the extension gives them more time to try and work through some of the longstanding trade concerns,“ he said.
The White House declined to comment beyond Trump’s remarks. The Treasury Department and U.S. Trade Representative’s Office did not respond to requests for comment.
U.S. Treasury Secretary Scott Bessent has said Washington has the makings of a deal with China and he was “optimistic” about the path forward. Trump pushed for additional concessions on Sunday, urging China to quadruple its soybean purchases, although analysts questioned the feasibility of any such deal. Trump did not repeat the demand on Monday.
But Washington has also been pressing Beijing to stop buying Russian oil, with Trump threatening to impose secondary tariffs on China. - Reuters
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