U.S.-China "Tariff Truce" Extended for 90 Days - Continuation of '30% vs 10%'. How the U.S. and China Chose to "Buy Time"

90-Day Extension—Why the US-China "Tariff Truce" Continued

On August 11, local time, US President Donald Trump signed an executive order to extend the "truce" on tariffs against China for another 90 days. As a result, the automatic increase in tariffs, which was scheduled to take effect in the early hours of August 12 (US Eastern Time), has been postponed, and the current level of "US 30% - China 10%" is expected to continue until November 10. The extension has been confirmed by the White House and major media outlets.The White HouseThe Washington PostReutersFreightWaves

This decision functions as a safety valve to stop the "rapid acceleration" of US-China trade friction that had reignited since spring. Without the extension, there was speculation that US tariffs on China could jump to over 54%. The market was most wary of this "snapback" (automatic return) clause.NDTV Profit

Clarification of Facts: When, Which Clauses, and How They Were Extended

• Starting Point: In a May 12 executive order, the application of additional tariffs was suspended for 90 days, and a framework imposing an additional 30% tariff was introduced as an alternative (US government documents). This suspension was set to expire on August 12 at 12:01 AM (US Eastern). With the recent signing, this suspension (i.e., truce) has been extended for another 90 days.The White House

• China's Response: The Chinese government also announced a similar 90-day extension on the suspension of some of its own tariff increases. This has resulted in a continued "freeze" on both sides.NDTV Profit

• Current Levels: With this extension, the US's additional tariffs on China remain at 30%, and China's additional tariffs on the US remain at **10%** (according to logistics and trade specialist media).FreightWaves

Background: Stockholm Round Trips and Side Issues

The groundwork for the extension was laid by the Stockholm talks at the end of July. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng led delegations to the meeting, aligning the framework for the truce extension. The US reportedly also brought security-related concerns to the table, such as oil purchases under sanctions against Russia and dual-use technology exports to Russia.Reutersenglish.www.gov.cn

The White House also released a joint statement reflecting on the journey to Stockholm (Geneva in May, London in June), suggesting that "negotiations will continue." The current extension is a continuation of that trajectory.The White House

What Has Stopped and What Is Moving

This extension is a decision to "stop further tariff increases," not a complete withdrawal of existing barriers. Rather, the US and China are in the stage of accumulating piecemeal relaxations in strategic sectors such as rare earth magnets and semiconductor export controls. Data has also reported a decline in China's rare earth magnet exports from spring to early summer, with a gradual recovery by June.NDTV Profit

In semiconductors, it has been revealed that NVIDIA and AMD continue some sales to China under conditional licenses. Trump has hinted that he might allow sales of "scaled-down versions" of the latest AI chips, indicating a continued tug-of-war between regulation and business opportunities.NDTV Profit

Political and Diplomatic Outlook: Is a "Handshake" in October Possible?

With the time gained from the extension, the US and China are expected to continue laying the groundwork for high-level contact at the end of October. Some analysts suggest that the extension paves the "runway" for a Trump-Xi meeting.Reuters

However, the extension does not mean a permanent thaw. The US continues to use **reciprocity** as its banner, selectively applying "tax cuts and increases" by industry. White House documents also mention security concerns (such as market access to China and data/technology outflows).The White House

How the Market Viewed It

Following the extension announcement, **Chinese large-cap ETFs (FXI)** and related stocks moved to price in "worst-case scenario avoidance," albeit with volatility. Tech-led supply chain stocks (e.g., NVIDIA) reacted nervously to headlines, but rather than a one-directional plunge or surge, the impression was of a "wait-and-see" approach.

Practical Impact on Industry and Supply Chains

• Visibility for at Least 90 Days: Port-logistics-inventory planning can be reorganized on the assumption of "status quo" until November 10. The extension just barely meets the prelude to the year-end sales battle (October-November).

• Avoidance of Tariff Cost "Ceiling": Observations of a snapback to over 54% have receded, avoiding further acceleration of price pass-through. Price elasticity is returning, particularly in general consumer goods and assembled electronic products.NDTV Profit

• Uncertainty Remains in Strategic Areas: Rare earths and high-performance semiconductors are expected to continue under individual permits and quantity supervision. Companies should continue to review alternative supply sources and inventory safety rates.NDTV Profit

SNS Reactions: "Parallel Lines" Between Market and Security Advocates

Discussions on SNS (X/Weibo, etc.) regarding this extension appear to be divided into three layers (summary of editorial monitoring).

1. Market and Investor Group:
   "Avoidance of a hard landing of uncertainty," "Short-term is risk-on, but November will again be event-driven," with a notable trend of "tactical optimism." In threads on emerging markets, Chinese ADRs, shipping, and logistics, there are many posts rushing to update estimates from raw materials to finished products.

2. Industry and Operations Group: From supply chain managers, there are voices of "resetting lead times and inventory thresholds in extension mode until November," and "continuing cost comparisons of FTAs/third-country circumvention," reflecting practical responses. In the logistics industry, there is also hope for a "pause in the rise of spot freight rates."

3. Security and Hardline China Group: Concerns remain strong with comments like "watered down" and "AI and data outflows won't stop." Meanwhile, on Chinese SNS, there is a spread of "pragmatism," with comments like "prioritizing practical benefits," "appreciating phased relaxation, but permanence is important."