On August 11, 2019, President Donald Trump extended a tariff truce with China for an additional 90 days, delaying the implementation of higher tariffs that could have escalated to 145% on Chinese goods. This decision came as U.S. retailers were gearing up for the crucial holiday season, allowing imports such as electronics, apparel, and toys to be subject to lower tariffs. The original deadline for this tariff escalation was set for August 12, but the extension gives both countries more time to negotiate amidst rising trade tensions.
At a press conference, Trump maintained a positive outlook regarding his relationship with Chinese President Xi Jinping and hinted at ongoing discussions between the two nations aimed at reaching a trade agreement before the end of the year. U.S. tariffs on Chinese goods will continue at 30%, while Chinese tariffs on U.S. products remain at 10%. Analysts have noted that the prior triple-digit tariffs instituted by both countries were unsustainable and had created a near trade embargo between the world’s two largest economies.
Following a period of intense negotiations that began in May, U.S. trade officials have been advocating for further talks to resolve outstanding trade issues, including China’s agricultural purchases. Despite earlier requests for China to drastically increase its soybean imports, the feasibility of such demands is under scrutiny.
The trade deficit with China has been narrowing significantly, down to $9.5 billion in June 2019, its lowest since 2004. This strategic pause in tariffs aims to alleviate anxiety on both sides as discussions continue, potentially paving the way for a broader deal in the fall.
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