Tensions arise once more: Hint of further hold-up in U.S.-China customs matters - Delay in action: United States announces fresh postponement regarding customs issues with China
In a move to maintain the fragile truce established by recent preliminary trade agreements, the Trump administration is actively negotiating an extension of the current tariff pause between the US and China. The 90-day tariff pause, which is set to expire on August 1, 2025, was initially agreed upon in mid-May and temporarily reduced reciprocal tariffs to 10%.
The ongoing negotiation for an extension aims to prolong this arrangement, with Treasury Secretary Scott Bessent planning talks with Chinese officials in early August. However, the final decision depends on the outcome of these discussions and legal/judicial factors expected around July 31, 2025.
Meanwhile, it's worth noting that Trump has extended the deadline for tariffs on the European Union to August 1, with a 30% surcharge set to apply from that date. Despite these developments, many traders on US exchanges expect Trump to back down again on the tariff issue, a belief referred to as the "Taco" effect.
Contrary to some speculation, there is no specific mention of discussions in Stockholm influencing this extension. However, the general trajectory supports an extension effort based on recent negotiations and statements by US officials.
It's also important to note that if negotiations to extend this pause are unsuccessful, tariffs would revert to higher rates, such as from 10% back to 34% for some reciprocal tariffs. The agreement between the US and China is currently set to expire on August 12, and several tariffs remain in force, including a 20% fentanyl-related tariff, so the effective tariff burden on Chinese imports remains significantly elevated.
The location of any potential negotiations, such as those mentioned above, was not specified in the available information. Beijing responded with high retaliatory tariffs to US tariffs, but no new information about Beijing's response to the tariff situation was provided in this paragraph.
In conclusion, the US and China are in talks to extend the current tariff pause beyond August 1, with the final decision dependent on ongoing discussions and legal/judicial outcomes. The tariff agreement between the two countries is currently set to expire on August 12.
The Commission, given the ongoing tariff negotiations between the US and China, might consider submitting a proposal for a regulation in the finance and industry sectors, aiming to adjust the current tariff system in the context of general-news and politics. Despite the uncertainties surrounding the tariff situation, it's crucial for traders and stakeholders to stay informed about the progress of these negotiations, as the outcome could significantly impact the trend of product preferences in certain industries.
