Escalating Trade Tiff: U.S. and China Strike Deal on Waiving Additional Tariffs
In a significant development, U.S. President Donald Trump has deferred the introduction of new tariffs in the trade between the U.S. and China through an executive order. This decision comes as part of the ongoing discussions and modifications following recent executive orders by President Trump.
Key Developments
The tariff landscape between the two economic powerhouses has been dynamic, with several key developments taking place. In April 2025, President Trump issued Executive Orders 14257, 14259, and 14266, which modified reciprocal tariff rates, particularly for imports from China. These orders aimed to address trade reciprocity issues and respond to China's retaliation against U.S. tariffs.
The U.S. raised ad valorem duties on imports from China due to China's announced retaliation. However, subsequent discussions led to a suspension of additional tariffs for 90 days, which expired on August 12, 2025. The current status of tariffs between the U.S. and China continues to be a focus of negotiations, with the U.S. engaging with China to address trade imbalances and national security concerns.
Tariff Rates and Suspensions
The U.S. has implemented a 125% tariff on China, while maintaining lower tariffs for other countries like Canada and Mexico. Meanwhile, a proposed increase to a baseline reciprocal tariff rate of 15-20% was announced in July 2025. However, the threatened mega-tariffs, which would have been over 100% on goods from each other's country, were averted at the last minute with the agreement on a further tariff pause.
The tariff suspensions will last until November 10, extending the initial 90-day suspension agreed upon in Geneva talks in May. During this period, duties on goods exported from China to the U.S. will remain at 30%, while duties on U.S. exports to China will remain at 10%. No retaliatory tariffs have been imposed by China, instead, negotiations between both sides continue.
Market Impact
The stock exchange is likely to bring relief to investors due to the further deferment of tariffs, as indicated by the positive start of the DAX and Dow-Jones future. However, the DER AKTIONÄR Stimmungsindikator (DASI) shows that market sentiment remains dominated by fear.
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In conclusion, the tariff landscape between the U.S. and China remains in a state of flux, with ongoing negotiations and periodic adjustments in response to trade imbalances and geopolitical tensions. All other elements of the agreement between the U.S. and China remain unchanged, and the Chinese Ministry of Commerce has also suspended the planned increase in tariffs on U.S. goods for 90 days.
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