President Trump’s executive order extends a reprieve from the threat of rising tariffs between the world’s two largest economies.
President Trump extended a truce between the U.S. and China on tariffs, a move that could potentially set the stage for a summit with Chinese leader Xi Jinping later this year.
With hours left on the clock before the looming midnight Tuesday deadline, Trump’s executive order acknowledged that China was taking “significant steps” toward addressing American concerns on “economic and national security matters.” Beijing announced the truce extension at the same time.
Allowing the truce to expire would have sent tariff rates for both countries skyrocketing, dealing a major blow to trade between the world’s two largest economies. The U.S. will keep its standard tariff rate on Chinese goods at 30%, and China will keep its own rate on American goods at 10%.
The extension gives the two sides a further 90 days to iron out their differences on a range of issues as Trump seeks to reshape the global economy in favor of bringing manufacturing back to the U.S. It also arrives as the U.S. announces several trade agreements with countries including South Korea and Japan on the one hand, while it levies steep tariffs on several nations on the other — for example, Trump has threatened to raise U.S. tariffs to 50% on Indian exports to the U.S. later in August, due to that country’s continued purchases of Russian oil.
“Today’s news all-round stabilizes the situation, increases confidence for American consumers, for importers of goods who sell those goods in the U.S., and for manufacturers in China”, said David Meale, the head of Eurasia Group’s China Division and a former diplomat and deputy chief of mission for the U.
