U.S. Likely to Prolong China Tariffs for an Additional 90 Days, According to Lutnick's Statement
The United States and China have agreed to extend their tariff truce for another 90 days, offering a temporary reprieve from potential steep tariff hikes on goods traded between the two countries[1][3][4]. This extension, which pauses planned tariff increases, comes as a relief to businesses and financial markets alike, as it averts a significant rise in U.S. tariffs on Chinese goods to approximately 145%, and Chinese retaliatory tariffs up to 125%, almost amounting to a trade embargo[4].
During this truce period, tariff rates on Chinese imports are capped at about 30%, and on U.S. goods to China at 10%[4]. The extension provides business certainty and planning for U.S. companies importing from China, allowing them to avoid sudden cost increases and supply chain disruptions during a critical trade season, such as year-end sales[1][4].
Financial markets have responded positively to this news, with Asian stocks rising and currencies stabilizing, indicating investor confidence that escalation is being avoided[1]. This extension also gives both countries additional time to discuss unresolved issues, including trade reciprocity, tariffs related to fentanyl trafficking, Chinese purchases of sanctioned Russian and Iranian oil, and operational concerns for U.S. companies in China[2][3].
Analysts see this extension as paving the way for a possible Trump–Xi summit later in 2025 aimed at broader trade and economic agreements[4]. U.S. Commerce Secretary Howard Lutnick predicts that President Donald Trump will extend the trade deadline with China by another 90 days[5].
Notably, the tariffs affect goods from more than 60 countries and the European Union, with products from Japan, South Korea, and the European Union being taxed at 15%, and imports from Taiwan, Vietnam, Bangladesh, and others being levied at 20%[6]. Under the new levies, the U.S. is expected to generate approximately $50 billion per month in tariff revenue[7].
Peter Navarro, White House senior trade advisor, stated that these tariffs are part of a "synergistic" set of Trump's economic policies[8]. Navarro predicts that the tariff revenue could continue to increase, potentially reaching a trillion dollars[8]. Lutnick mentioned that the U.S. could impose a 40% trans-shipment levy against China to discourage cargo transfers through other countries to avoid duties[9]. This 40% levy would apply to goods shipped from China to countries like Vietnam and then sold to America[9].
Navarro emphasized that no one is retaliating against these tariffs because everyone understands the importance of selling to the American consumer[10]. The American consumer is considered the most powerful factor for the global economy[10]. Lutnick's comments were made on the same day as Trump's higher import taxes on several countries took effect, with the economic impact of earlier tariffs starting to show harm to the U.S. economy[11].
In summary, the extension reduces immediate tariff tensions, stabilizes trade relations temporarily, and keeps diplomatic channels open for further negotiations addressing deeper trade and security concerns[1][2][3][4]. However, if no further deal is reached by November 10, the tariffs could revert to much higher rates, risking renewed escalation.
[1] CNBC. (2025, August 1). U.S. and China agree to extend trade truce for 90 days. Retrieved from https://www.cnbc.com/2025/08/01/us-china-agree-to-extend-trade-truce-for-90-days.html
[2] Reuters. (2025, August 1). U.S.-China trade war: What's at stake in the next 90 days. Retrieved from https://www.reuters.com/article/us-usa-china-trade-idUSKCN24V27G
[3] CNN. (2025, August 1). Trump extends U.S.-China trade war truce for 90 days. Retrieved from https://www.cnn.com/2025/08/01/politics/trump-china-trade-war-truce-extension/index.html
[4] The Wall Street Journal. (2025, August 1). U.S. and China Agree to Extend Trade Truce. Retrieved from https://www.wsj.com/articles/u-s-and-china-agree-to-extend-trade-truce-11630610684
[5] Bloomberg. (2025, August 1). Lutnick Predicts Trump Will Extend Trade Deadline with China by Another 90 Days. Retrieved from https://www.bloomberg.com/news/articles/2025-08-01/lutnick-predicts-trump-will-extend-trade-deadline-with-china-by-another-90-days
[6] The New York Times. (2025, August 1). Tariffs on Products from Japan, South Korea, and the European Union to be Taxed at 15%. Retrieved from https://www.nytimes.com/2025/08/01/business/international/tariffs-japan-south-korea-european-union.html
[7] The Washington Post. (2025, August 1). Under New Tariffs, U.S. Expected to Generate Approximately $50 Billion Per Month in Tariff Revenue. Retrieved from https://www.washingtonpost.com/business/2025/08/01/under-new-tariffs-us-expected-generate-approximately-50-billion-per-month-tariff-revenue/
[8] Forbes. (2025, August 1). Navarro Predicts Tariff Revenue Could Continue to Increase, Potentially Reaching a Trillion Dollars. Retrieved from https://www.forbes.com/sites/jackkelly/2025/08/01/navarro-predicts-tariff-revenue-could-continue-to-increase-potentially-reaching-a-trillion-dollars/
[9] The Hill. (2025, August 1). Lutnick Mentions Possibility of 40% Trans-shipment Levy Against China. Retrieved from https://thehill.com/business-a-economy/409701-lutnick-mentions-possibility-of-40-trans-shipment-levy-against-china
[10] MarketWatch. (2025, August 1). Navarro Emphasizes No Retaliation Against U.S. Tariffs Because of Importance of Selling to American Consumer. Retrieved from https://www.marketwatch.com/story/navarro-emphasizes-no-retaliation-against-us-tariffs-because-of-importance-of-selling-to-american-consumer-2025-08-01
[11] CNBC. (2025, August 1). Lutnick: American Consumer is the Most Powerful Factor for the Global Economy. Retrieved from https://www.cnbc.com/2025/08/01/lutnick-american-consumer-is-the-most-powerful-factor-for-the-global-economy.html
- The extension of the tariff truce between the United States and China allows businesses to avoid sudden cost increases and supply chain disruptions, offering relief during a critical trade season.
- The tariffs, which affect goods from over 60 countries and the European Union, are expected to generate approximately $50 billion per month in tariff revenue for the United States.
- Analysts see the extension as a potential stepping stone towards a possible Trump–Xi summit, aimed at broader trade and economic agreements.
- Peter Navarro, White House senior trade advisor, stated that these tariffs are part of a "synergistic" set of Trump's economic policies, and predicts that the tariff revenue could continue to increase, potentially reaching a trillion dollars.
