Trump Signs 90-Day Tariff Extension — Businesses Brace for Impact

Trump Signs 90-Day Tariff Extension — US President Donald Trump on Monday signed an important executive order, under which new additional tariffs on China were postponed for 90 days. These tariffs were originally scheduled to come into effect from Tuesday, but this decision has once again pushed back the deadline for the implementation of the harsh economic taxes.

The action follows the existing negotiations between the US and China on the overall trade agreement. Both parties have also made it clear that they do not desire confrontation instead establishing a solution to move on and hold stability in trade relations.

Announcement on social media and China’s consent

Trump announced through social media at around 8 pm (Eastern Time) on Monday night that he had signed the order. At the same time, China’s state news agency ‘Xinhua’ also officially confirmed that it is accepting this tariff break.

This coordinated announcement shows that the channels of dialogue between the two countries are still open and importance is being given to dialogue before taking unilateral tough steps.

Tariff rates will remain unchanged for the time being

This extension means that the rates of 30% on Chinese imports and 10% on American goods decided in May will remain in place for the time being, and the new deadline has been extended to November 10. Earlier, tariff rates were expected to go up to three digits, which could cause major turmoil in global markets.

However, effective rates between the two countries still remain high due to additional tariffs imposed on certain sectors such as steel and medical supplies.

Attention also on the Russia-Ukraine war and India

Interestingly, this tariff expansion has come at a time when Trump has focused more on the war between Russia and Ukraine in recent times. He has also ordered an additional 25% tariff on imports from India.

The reason for this is said to be India’s continued consumption of Russian oil, which is not in line with US policy. This shows that the Trump administration is adopting a strategy of economic pressure on many fronts simultaneously.

Possibility of Trump-Xi Jinping meeting

This new tariff break also increases the possibility of a possible meeting between the top leaders of the two countries – President Donald Trump and President Xi Jinping. According to sources, the teams of the two leaders have put forward the idea of a face-to-face meeting later this year, perhaps at the Asia-Pacific Economic Cooperation (APEC) summit in South Korea in late October.

If this meeting takes place, it could prove to be a turning point for the economic relations between the two countries.

Glimpses of recent trade talks

Monday’s announcement comes after three important meetings in the last three months.

• Geneva in May
• London in June
• Stockholm in July

In these meetings, top trade representatives of the two countries discussed many issues in detail. Although all the differences have not been fully resolved so far, there have definitely been signs of progress.

Leadership of the Chinese side and the atmosphere of talks

China was represented in these meetings by Vice-Premier He Lifeng. His representative and Chinese trade negotiator Li Chenggang said after the last meeting in Sweden that there was a “frank and open dialogue on economic concerns” between the two sides.

This statement shows that efforts are being made to maintain transparency and honesty in the talks, which is essential for any long-term agreement.

Important issues of the talks – from chips to minerals

So far, the talks have been dominated by issues such as permission to re-supply the semiconductor industry, especially Nvidia’s AI chips to China, and the export of rare earth minerals from China.

There are still many topics in a long list between the two countries, which are yet to be agreed upon – including intellectual property rights, cybersecurity, and limits on technology exports.

Agreement with Nvidia and AMD

Over the weekend, the Trump administration struck a deal with Nvidia and AMD, under which these companies will be allowed to sell some chips in the Chinese market. In return, the US government will get a 15% share on these sales.

This deal can be used as an illustration of give and take in that the market is given to the American companies and the revenue is given to the government.

Conclusion:

This 90-day tariff pause is window term by which the differences between two countries can be sorted out and can be taken to a permanent solution.

Although the difficulties are still enormous, the recent negotiations and the agreements provide some light at the end of the tunnel. Next several months will reveal whether this break becomes a permanent peace or this is going to be yet another temporary reprieve.

FAQs: