US, China extend trade war truce for 90 days

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What happened

President Donald Trump and China’s government Monday extended a truce in their trade war for another three months, giving negotiators until Nov. 10 to secure a trade agreement or another extension.

Trump threatened China with tariffs as high as 145% in April, provoking retaliatory tariffs of 125% from Beijing, before a temporary truce in May lowered tax rates to 30% on Chinese imports and 10% on U.S. goods.

Who said what

April’s triple-digit tariffs “amounted to a de facto trade embargo” between the world’s two biggest economies and showed that China could “create supply shortages that risked empty shelves at Walmart” and a shortage of rare-earth magnets for defense contractors, The Washington Post said.

While the European Union, Japan and other U.S. trading partners “agreed to lopsided trade deals with Trump,” accepting “once unthinkably” high U.S. tariffs, The Associated Press said, China showed it had a “cudgel of its own,” testing the “limits of a U.S. trade policy built around using tariffs” as a bludgeon. “Having demonstrated their ability to hurt each other,” the two nations have been “talking ever since.”

What next?

The extension of the truce “buys crucial time for the seasonal autumn surge of imports for the Christmas season, including electronics, apparel and toys at lower tariff rates,” Reuters said. But with U.S. grievances unlikely to be resolved in a grand bargain, the “trade war will continue grinding ahead for years into the future,” former U.S. diplomat and trade official Jeff Moon told the AP.