US-China Trade Truce Extended: Tariffs Delayed, Markets React

On August 11, 2025, U.S. President Donald Trump signed an executive order extending the existing tariff truce with China for an additional 90 days, preventing a significant escalation in trade tensions between the world’s two largest economies. This decision delays the imposition of higher tariffs that were set to take effect, maintaining the current tariff rates and providing more time for negotiations. The Times of IndiaThe Guardian+2The Times of India+2

Trade Dynamics and Economic Implications

The extension of the tariff truce has been welcomed by businesses and investors, as it averts the immediate threat of increased duties on Chinese imports. This move is seen as a positive step toward stabilizing trade relations and fostering an environment conducive to economic growth.

China’s Trade Surplus and Export Strategies

Despite ongoing trade challenges, China’s overall goods trade surplus has reached a record $1.2 trillion over the last 12 months. This significant increase reflects China’s efforts to diversify its export markets and reduce reliance on the U.S. In July 2025, China’s exports grew by 7.2% year-on-year, with exports to the U.S. declining by 21.6%, indicating a strategic shift towards other global markets. Facebook+2X (formerly Twitter)+2DataTrack

Market Reactions and Outlook

Following the announcement of the tariff truce extension, global stock markets experienced a rally, reflecting investor optimism about the potential for de-escalation in trade tensions. However, analysts caution that while the extension provides temporary relief, underlying issues such as intellectual property rights, technology exports, and trade imbalances remain unresolved and could continue to impact the trade relationship between the U.S. and China. Financial Times

The extended truce offers a window for both nations to engage in further negotiations aimed at addressing these complex issues. The outcome of these discussions will be crucial in determining the future trajectory of U.S.-China trade relations and their broader economic implications.

Stay Updated with Daily Forex Pakistan.