U.S. and China Extend Trade Truce by 90 Days

A container ship is moored at the port of New York & New Jersey in Elizabeth, N.J., Monday May 12, 2025. President Donald Trump extended a trade truce with China for another 90 days, delaying a dangerous showdown between the world’s two biggest economies.

Trump posted on his Truth Social platform that he signed the executive order for the extension, stating that “all other elements of the Agreement will remain the same.” Beijing also announced the extension of the tariff pause via official news agency Xinhua.

The previous deadline was set to expire at 12:01 a.m. Tuesday. Had that happened the U.S. could have ratcheted up taxes on Chinese imports from an already high 30%, and Beijing could have responded by raising retaliatory levies on U.S. exports to China.

The pause buys time for the two countries to work out some of their differences, perhaps clearing the way for a summit later this year between Trump and Chinese President Xi Jinping, and it has been welcomed by the U.S. companies doing business with China.

Sean Stein, president of the U.S.-China Business Council, said the extension is “critical” to give the two governments time to negotiate a trade agreement that U.S. businesses hope would improve their market access in China and provide the certainty needed for companies to make medium- and long-term plans.

“Securing an agreement on fentanyl that leads to a reduction in U.S. tariffs and a rollback of China’s retaliatory measures is acutely needed to restart U.S. agriculture and energy exports,” Stein said.

Reaching a pact with China remains unfinished business for Trump, who has already upended the global trading system by slapping double-digit taxes – tariffs – on almost every country on earth.

Claire Reade, senior counsel at Arnold & Porter and former assistant U.S. trade representative for China affairs, said, “The U.S. has realized it does not have the upper hand.”

Ali Wyne, a specialist in U.S.-China relations at the International Crisis Group, said, “By overestimating the ability of steep tariffs to induce economic concessions from China, the Trump administration has not only underscored the limits of unilateral U.S. leverage, but also given Beijing grounds for believing that it can indefinitely enjoy the upper hand in subsequent talks with Washington by threatening to curtail rare earth exports.''

Jeff Moon, a former U.S. diplomat and trade official who now runs the China Moon Strategies consultancy, said, “The trade war will continue grinding ahead for years into the future.”

The United States and China have agreed to extend their trade truce by 90 days, according to sources familiar with the matter. This move comes as the world's two largest economies continue to negotiate a more comprehensive agreement.

"We're making progress," said a senior administration official. "We're getting closer."

Despite the positive developments, tensions between the two nations remain high. The trade war has had significant impacts on both countries' economies and industries, with many businesses facing challenges in navigating the complex tariffs and regulations.

"The Chinese government has been very consistent in its approach," said a Beijing-based analyst. "They've been pushing for concessions from the US side, but it's not just about giving in to their demands – it's about finding a mutually beneficial agreement."

The 90-day extension provides a window of opportunity for both sides to continue negotiating and make progress on key issues such as intellectual property protection, currency manipulation, and market access.