- The 90-day US–China trade truce is on the brink of expiration.
- Tariff hikes of up to 245% (US on China) and 125% (China on US) are on the table.
- Nvidia and AMD struck revenue-sharing deals to maintain Chinese market access.
A 90-day trade pause between the United States and China was set to expire Tuesday, raising fears of renewed tariff escalations between the two largest economies. Chinese officials publicly urged the US to “strive for positive outcomes” and follow the consensus reached in a recent call between the two heads of state.
Current Positions and Risks
Both sides signaled optimism after last month’s talks in Stockholm, with US Treasury Secretary Scott Bessent saying there were “the makings” of a deal. However, President Trump has yet to confirm an extension, instead emphasizing the strength of US tariffs in a Monday social media post. Failure to extend the truce could see tariffs spike to 245% on Chinese goods and 125% on US exports to China, triggering a sharp escalation.
Currently, US exports to China face around 30% tariffs, while imports from China have a 10% base tariff plus an additional 20% levy linked to fentanyl-related sanctions. Some categories are taxed even higher. Economists, including the Federal Reserve, warn such tariffs increase US prices, with Goldman Sachs estimating consumers have already absorbed 22% of costs—potentially rising to 67% under new rates.
Strategic Side Deals
In anticipation of tighter restrictions, chipmakers Nvidia and AMD agreed to pay the US government 15% of revenue from advanced chip sales to China in exchange for export licenses. Former US trade negotiator Stephen Olson described the arrangement as “monetization of US trade policy,” calling it a “new and dangerous world.”
Additional Trade Demands
Trump has also demanded that China quadruple its soybean imports from the US to reduce the trade deficit. This comes alongside existing high-tariff barriers and the possibility of mutual retaliation if the truce lapses.
