U.S.-China Trade Truce Deadline Nears Amid Rising Tensions

The U.S. and China are racing against time to extend their fragile tariff truce, set to expire soon, as unresolved disputes over trade imbalances and export controls threaten to reignite tensions. Both nations had initially struck an optimistic tone after July talks in Stockholm, but President Trump’s silence on an extension has raised concerns. Current tariffs on Chinese goods include a 20% levy tied to fentanyl flows and a 10% baseline, while U.S. exports to China face over 32.6% duties.

Trade between the two economies has already suffered, with China’s U.S.-bound exports dropping 21.7% in July. A potential deal could involve China boosting purchases of American energy, agriculture, and semiconductors, mirroring the unmet $200 billion target from the 2020 phase-one agreement. Trump recently urged China to ’quadruple soybean orders,’ hinting at tougher demands. Meanwhile, exports to Southeast Asia have surged, raising suspicions of transshipment to bypass tariffs.

Semiconductor tensions add another layer, as the U.S. weighs easing some chip export controls to secure a deal, despite warnings about fueling China’s AI and military growth. Nvidia’s planned H20 chip sales to China signal a minor concession, but experts caution against expecting major policy shifts. With both sides structurally drifting toward decoupling, the path to a stable trade relationship remains uncertain.

US-China tradetariffsDonald TrumpXi JinpingexportsimportssemiconductorfentanylEurasia Groupphase-one deal