Trump's move has warded off the risk of a three-digit tariffs on bilateral goods just hours before the old deadline expired.
Accordingly, the tax increase expected to be applied from 0:01 on August 12 (Eastern time) will be postponed to mid-November. This decision helps the US maintain low taxes during the peak import period at the end of the year, especially for electronics, clothes, and toys for the Christmas season.
If it is not extended, US import tariffs on Chinese goods will skyrocket to 145%, while China will also increase tariffs to 125% on US goods - a level analysts say is equivalent to a "commercial embargo" between the world's two largest economies. Currently, the tariffs applied by both sides are 30% (US to Chinese goods) and 10% (China to US goods).
Speaking to the press a few hours before signing the decree, Mr. Trump only briefly said: "We will wait and see what happens", while emphasizing his good relationship with General Secretary and President of China Xi Jinping.
Observers say this is a positive sign, in line with recent moves to " cool down" trade tensions, showing that Washington and Beijing are trying to find a deal, paving the way for the possibility of a summit between President Donald Trump and General Secretary and President Xi Jinping in the fall.
The two sides had previously agreed to postpone the tariffs for 90 days after the negotiations in Geneva, Switzerland (May) and continue to meet in Stockholm, Sweden (July). US negotiators on their return have advised Trump to extend the deadline.
Former US trade official Kelly Ann Shaw commented: This is exactly the style of President Trump negotiations - always letting things last until the last minute. He likely asked China for further concession before agreeing to an extension.
On August 10, Mr. Trump asked Beijing to increase the amount of US soybean purchases by 4 times, but it is not clear whether China will approve or not. He did not repeat this request on August 11.
According to former trade official Ryan Majerus, the decision to extend will help both sides reduce pressure, have more time to handle long-standing problems and aim for a framework deal in the fall.
US Commerce Department data showed that imports from China fell sharply in June, causing the US-Mid-Autumn trade deficit to narrow to $9.5 billion, the lowest level since February 2004. In just 5 months, this deficit has decreased by 70% compared to the same period last year.
In addition to the tax issue, the US is also pressuring China to stop buying Russian oil, warning that it will impose additional sanctions if Beijing continues to import.
