Trade Truce Extension Offers Temporary Relief Amidst Ongoing US-China Tensions

Wed Oct 22 2025 01:57:49 GMT+0300 (Eastern European Summer Time)

The United States and China have agreed to extend their trade truce for another 90 days, alleviating concerns of impending tariff hikes but leaving uncertainty for businesses in both nations.

The temporary extension of the US-China trade truce gives both countries more time to negotiate unresolved trade imbalances and practices, despite ongoing tensions that have already strained economic relations between the world's largest economies.

In a significant diplomatic move, the United States and China have opted to extend their trade truce for an additional 90 days, just prior to scheduled tariff increases. US President Donald Trump issued an executive order on Monday, maintaining the current tariffs on Chinese imports, which stands at 30%, while China will continue to impose a 10% tariff on American goods.

This extension comes after both countries had previously threatened to impose punitive tariffs that could have reached as high as 145% on Chinese products and 125% on US goods. Fortunately, talks held in Geneva in May prompted a scaling back of these rates, fostering a temporary easing of trade hostilities.

The truce aims at providing more time to negotiate vital issues, including addressing trade imbalances, unfair practices, and enhancing access for US companies in China. The White House indicated that the ongoing discussions are essential in light of the reported trade deficit nearing $300 billion with China in 2024.

Chinese embassy representatives in Washington emphasized the importance of "win-win cooperation" and urged the US to reconsider its restrictive trade policies, advocating for a collaborative approach to benefit both nations and stabilize global semiconductor markets.

Nevertheless, business owners remain concerned over the uncertainty that the truce creates. Beth Benike, founder of Busy Baby, expressed frustration at the lack of clarity around future tariffs, stating that it hampers her ability to plan effectively for her business operations.

Relations between the two economic giants have been particularly fraught this year. Trump's administration had announced aggressive new tariffs on several countries, with China being one of the primary targets. In response, Beijing enacted its own tariffs, leading to a dramatic escalation of economic confrontation.

Despite ongoing efforts to negotiate access to critical resources and technology exports, the backdrop of unresolved tensions continues to affect trade flows. US imports of Chinese goods saw a nearly 50% decrease in June compared to the previous year, illustrating the palpable impact of disrupted trade dynamics.

While the truce offers a temporary buffer against escalating tariffs, the path forward for US-China relations remains tenuous, with both sides still entangled in complex negotiations surrounding economic stability, trade practices, and emerging technological competition.