China and the United States extend the 90-day tariff truce, giving trade a break during the year-end holiday

Background on the extension of the US-China tariff truce

On August 11, US President Trump signed an executive order extending the tariff truce until 12:01 AM ET on November 10, 2025, preventing further tariffs of up to 145% on Chinese goods (Source: Reuters). China's Ministry of Commerce simultaneously announced a suspension of tariffs of up to 125% on US goods and postponed previously implemented restrictions on some US companies.
The extension means that both sides will maintain the status quo of 30% US tariffs on China and 10% China tariffs on the US before the Christmas and autumn import peak season, creating a window period with lower tariffs for imports of electronic products, clothing, toys, etc.

Motivations of both parties and market interpretation

Trump said on "Truth Social" that China and the United States are continuing to discuss "non-reciprocal trade" and "economic and national security" issues, and said that "China is handling it very well." Analysts believe that this move is laying the foundation for the "Xi-Trump meeting" this fall.
Wendy Cutler, a former senior U.S. trade official, pointed out that combined with a series of recent "cooling" measures by both sides, this sends a signal of efforts to seek an agreement.
The 90-day negotiation period following the Geneva talks in May was originally due to end on August 13, but extending it to November will give both sides more time to find a balance on sensitive issues.

The Chinese Ministry of Commerce announced the "China-US Stockholm Economic and Trade Talks Joint Statement" early on the morning of the 12th, which was reached during the China-US economic and trade talks held in Stockholm, Sweden from July 28th to 29th. (Xinhua News Agency)

Potential impact on the economy and investment

U.S. Treasury Secretary Scott Bessant has emphasized that triple-digit tariffs are tantamount to a "trade embargo" and are unsustainable. Recent data shows that the U.S. trade deficit with China fell to $9.5 billion in June this year, the lowest since February 2004 and a 70% decrease from the same period last year (Source: U.S. Department of Commerce).
For investors, short-term market sentiment is expected to benefit from tariff buffers, with temporary positive impacts on retail, shipping, and import/export trade chains. However, the long-term outlook depends on the outcome of the autumn negotiations and whether both sides can achieve substantial progress in areas such as agricultural procurement (such as soybeans), export controls, and overcapacity.

Capital choice between buffer and uncertainty

During the extended tariff truce, investors can focus on short-term opportunities in sectors such as retail, logistics, cross-border e-commerce, and supply chain finance. Trade activity during the holiday stocking period could boost valuations in these sectors. However, caution should be exercised regarding medium- and long-term risks. If no agreement is reached in November, the impact of further tariff increases would quickly reverberate across the market, particularly in the manufacturing and agricultural product export sectors, which are heavily reliant on foreign trade. We recommend maintaining a flexible investment portfolio, closely monitoring the progress of the China-US negotiations and key milestones, avoiding single bets, and diversifying risk through a cross-regional and multi-asset portfolio.

In a market where uncertainty and gaming coexist, information and timing are equally important.

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Further reading

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• Trump promised to exempt gold from tariffs, and the gold and silver markets collectively breathed a sigh of relief