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Trade conflict between US and China temporarily deferred

Trade talks between both parties have put a halt on increased tariffs for a further 90 days, with the suspension initially set until Tuesday. This extension in the dispute negotiation period was agreed upon by both parties.

Trade conflict between US and China temporarily halted
Trade conflict between US and China temporarily halted

Trade conflict between US and China temporarily deferred

The US-China trade dispute, a long-standing issue that has been affecting global economics, has taken a temporary pause. On August 11, 2025, President Trump signed a 90-day extension of the tariff suspension, halting planned tariff hikes and maintaining existing tariff rates [1].

This extension aims to provide short-term stability for businesses and supply chains during the holiday trade season. The tariffs in the trade between the US and China, which were originally scheduled to increase, are currently suspended until November 10, 2025, at 00:01 local time in Washington [1].

Despite this truce, US tariffs on imports from China remain substantial, averaging 51.1% as of August 2025, covering all Chinese goods [2]. Similarly, Chinese tariffs on US exports average 32.6% [2]. The ongoing negotiations and talks continue, with hopes for a high-level summit later this year [1].

Commercially, tariffs continue to significantly impact US companies operating in China. A 2025 survey by the US-China Business Council (USCBC) found rising concerns due to tariffs, ranking them as the second most pressing challenge after overall US-China relations [3]. Nearly 70% of US companies reported direct impacts from tariffs, leading many to reconsider investment strategies, renegotiate prices, and shift supply chains to alternative markets such as Southeast Asia, India, and Mexico [3].

The tensions between the US and China extend beyond tariffs. For instance, Washington accuses China of deliberately withholding certain raw materials, and the US has gradually increased import tariffs on Chinese goods to up to 145 percent since April [1]. China, on the other hand, criticizes US export controls on semiconductors and AI chips for hindering Chinese companies' access to modern technology [1].

In a recent development, Trump announced that the US government receives a 15% share of sales of AI chips from American companies Nvidia and AMD to China [4]. This decision was confirmed by both the US President Donald Trump and the Chinese Ministry of Commerce [4].

China has shown openness to progress and is ready to achieve substantial progress with Washington. China's state-run "People's Daily" stated this, emphasizing Beijing's readiness to engage in constructive dialogue [4]. However, the suspension was left open whether it would be extended again after the trade talks. The previous pause would have expired on this Tuesday, but both sides agreed in Geneva to a 90-day suspension of the new tariffs in May [1].

The US intends to continue talks with China to address trade imbalances. Further talks between the US and China took place in London in June [1]. China responded with retaliatory tariffs of up to 125 percent and imposed export controls on strategically important raw materials [1].

In summary, the US-China trade dispute is currently in a state of tactical pause, with a tariff truce extended through November 10, 2025. Ongoing negotiations and talks continue, with hopes for a high-level summit later this year. US companies face ongoing challenges from tariffs and geopolitical tensions, adjusting investments and supply chains accordingly. The tensions between the US and China extend beyond tariffs, with both countries accusing each other of various trade-related offenses. Despite the truce, significant underlying tensions and tariff burdens remain in place as of August 2025.

  1. The tariff truce between the US and China is providing a temporary reprieve for businesses operating in the service industry, as it allows for short-term stability during the holiday trade season, potentially impacting their financial performance.
  2. With US tariffs averaging 51.1% and Chinese tariffs averaging 32.6%, the ongoing negotiations in the finance sector are crucial for companies in various industries, as high tariffs continue to significantly impact business decisions regarding investment and supply chain management.

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