US and China Extend Trade Truce Until November 10 to Avoid Tariff Hikes｜Background, Market Impact, and Future Outlook

US and China Extend Trade Truce Until November 10 to Avoid Tariff Hikes

The extension of the US-China trade truce has captured the attention of global markets.

Key Points

• United States and China extend the truce deadline until November 10.
• Additional tariffs (up to 145% and 125%) will be suspended for 90 days.
• Talks will continue on issues such as trade imbalances and unfair trade practices.
• Strategic sectors such as semiconductors and rare earth elements remain focal points in the negotiations.

Historical Background

Economic friction between the US and China has persisted for many years, particularly since the onset of the US-China trade war in 2018, which saw both nations impose high retaliatory tariffs that rattled the global economy. Key battlegrounds have included technology, agricultural trade, and rare resource supply chains. By 2024, the largest-ever tariff hikes were looming, leading to significant drops in imports and exports and dampening investor sentiment. This latest extension temporarily averts that worst-case scenario.

Details of the Extension and Scope of Talks

The extension agreement is more than just a delay—it represents a “framework reset” for resumed negotiations. The US will maintain tariffs on Chinese goods at 30%, while China will keep its tariffs on US goods at 10%. Talks will proceed in parallel across agriculture, energy, and high-tech sectors. The US will partially ease semiconductor export restrictions, allowing companies like AMD and NVIDIA to resume limited sales to Chinese firms. China, meanwhile, is leveraging rare earth supply stabilization as a negotiation tool.

Impact on Markets and Industries

Manufacturing and Supply Chains

In the short term, stability is expected; however, companies are still pushing forward with diversified sourcing and multinational production bases. Areas with high dependency—such as semiconductor manufacturing equipment, AI chips, and rare earth refining—face urgent needs to mitigate political risks.

Agriculture and Primary Commodities

The US aims to maintain its share of soybeans, corn, and pork in the Chinese market, while China is using expanded import quotas as a bargaining chip in the context of food security.

Digital Services

The issue of TikTok’s US business separation has become a new front in the battle over data sovereignty and IT regulation, with resolution expected to take time.

Latest Data and Trends

• US-China trade deficit in 2024: approximately $300 billion (largest on record).
• In the first half of 2025, US imports from China fell by 15% year-on-year, while exports dropped by 20%.
• In June, US imports from China declined by about 50% year-on-year.

Future Outlook and Scenarios

Experts envision three possible scenarios:

1. Deepened Agreement: Tariff reductions and expanded market access stabilize economic relations.
2. Status Quo: Repeated extensions without resolving structural conflicts.
3. Renewed Confrontation: Political tensions and geopolitical risks trigger new tariff hikes.

Conclusion

This extension provides both nations and the global economy with a crucial reprieve, but does not yet restore fundamental trust. Market participants should remain vigilant, gather information, and adjust strategies flexibly—especially monitoring developments in strategic resources such as semiconductors and rare earth elements.

For the latest analysis on international trade and market trends, visit the FIXIO Blog, updated regularly to support your investment strategies.