Trade dispute between US and China temporarily suspended for another 90 days, alleviating tension between the globe's leading economies.
The trade negotiations between the United States and China, which have been fraught with tension for years, are currently undergoing a phase of cautious thaw and ongoing dialogue. This new development comes as a result of the self-inflicted consequences of the Trump administration's earlier hubris.
As of August 2025, the tariff truce between the two economic powerhouses is working well. Treasury Secretary Scott Bessent stated that the U.S.-China tariff agreement is "working pretty well," with both sides agreeing not to impose previously threatened higher tariffs until at least November 10, 2025.
The U.S. has suspended China's country-specific tariff rates since August 11, 2025, with a baseline 10% duty on imports during this period. Several executive orders from earlier in 2025 have established and adjusted ad valorem tariffs and reciprocal rates in response to Chinese retaliations and ongoing talks.
One of the key issues being addressed in these negotiations is trade reciprocity. The original tariff deal lowered U.S. tariffs on Chinese goods from extremely high levels and reopened trade on critical rare earth magnets, a strategic resource that China controls. China has begun shipping rare earth magnets under the terms of the agreement, and the U.S. has lifted some countermeasures on them.
There is mutual interest in scheduling a meeting between U.S. President Trump and Chinese leader Xi Jinping, though no date has been finalized. National security and economic concerns, as outlined in executive orders by President Trump, remain important underlying themes in these discussions.
However, some analysts, such as Reade, do not expect much beyond limited agreements such as increased U.S. soybean sales and actions against fentanyl chemicals. America's tariffs have gone back down to 30% and China's to 10%, but the U.S. still has grievances over lax Chinese protection of intellectual property rights and Beijing's subsidies.
In May, the U.S. and China reduced massive tariffs they had imposed on each other's products. China agreed to make it easier for U.S. firms to get access to rare earths, a move that could potentially level the playing field in critical technology sectors. The U.S. will also pull back export restrictions on computer chip technology and ethane.
The United States and China reached an agreement in June to ease tensions, a significant step towards resolving the trade war that has been ongoing for over two years. The Americans say Chinese industrial policies give Chinese firms an unfair advantage in world markets, a concern that remains a focal point of the ongoing negotiations. Despite the progress made so far, the U.S. trade deficit with China was $262 billion last year, a figure that underscores the complexity of the issues at hand.
As the tariff truce nears its expiration in November 2025, both sides will be under pressure to reach a more comprehensive agreement. Further leader-level meetings are anticipated to set a longer-term course for the U.S.-China trade relationship.
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