President Donald Trump has extended a pause on additional tariffs for Chinese imports until November 10, averting an immediate cost surge for U.S. importers. The move buys negotiators time to finalize a broader trade deal while talks widen to include export controls and industrial capacity concerns.
Tariff Pause Signals Negotiating Momentum
Trump’s executive order extends the tariff truce first struck in May, when both sides scaled back steep retaliatory duties. The U.S. reduced its China tariff rate to 30%, while Beijing cut its own to 10% and removed other retaliatory measures. Without Monday’s extension, the pause would have expired on August 12, reinstating a duty stack that included a 20% fentanyl-related penalty and a 10% baseline reciprocal tariff.
The latest move follows last month’s Stockholm meetings between senior U.S. and Chinese officials, where negotiators outlined a framework that still requires final approval from Trump and Chinese President Xi Jinping. According to U.S. Treasury Secretary Scott Bessent, discussions now extend beyond tariff schedules to address American concerns over Chinese industrial overcapacity and its purchases of oil from Russia and Iran.
Beyond Tariffs: Export Controls and Strategic Leverage
The talks also intersect with separate negotiations over U.S. export controls on semiconductors critical to artificial intelligence systems. Washington has adopted a transactional approach in some cases, allowing companies like Nvidia and Advanced Micro Devices to sell restricted AI chips to China in exchange for remitting 15% of related revenues to the U.S. government, an unusual mechanism that effectively monetizes export permissions.
While the extension offers short-term cost stability for importers, underlying trade risks remain acute. China accounted for 10.9% of total U.S. trade in 2024 and was the source of America’s largest bilateral goods deficit, totaling roughly $295 billion. For many manufacturers, alternative sourcing plans remain incomplete, leaving them vulnerable if duties snap back at higher levels later this year.
The Risk in Reading a Pause as a Pivot
While the extension will be read by some as de-escalation, past cycles show tariff truces can collapse quickly when political timelines tighten or negotiations stall. For companies balancing long-lead production schedules against unpredictable policy swings, the operational risk is less about this 90-day window and more about the assumption that a deal will hold. The more prudent approach is to treat this reprieve not as a pivot point, but as a compressed planning period to harden supply chain contingencies before the next deadline arrives.