China has announced the extension of suspensions on a slew of trade measures against the United States on Monday, following a similar move by Washington days earlier, maintaining the bilateral trade truce ahead of a planned leaders’ summit.
The arrangement was initially due to expire on November 10. Following negotiations in September, both sides agreed to extend the truce – brokered in Busan last year – by two months until January 10, 2027.
The decision comes before President Xi Jinping and US President Donald Trump are expected to meet at the Asia-Pacific Economic Cooperation summit in Shenzhen next week, their third meeting this year.
Here, we look at what specific measures were paused and where the US-China trade truce stands now.
Tariffs
China will continue to suspend 24 per cent of additional tariffs on all imports from the United States for two months, retaining a 10 per cent levy, the State Council’s Customs Tariff Commission said.
Meanwhile, the US extended tariff waivers on 178 Chinese product categories from an earlier investigation related to Beijing’s intellectual property practices under Section 301 of the US Trade Act of 1974. The exclusion covers categories including some medical accessories, components for manufacturing solar products and industrial equipment.
The US maintains a Section 301 tariff rate of 12.5 per cent on Chinese imports over alleged forced labour concerns, a measure largely viewed as a replacement for Trump’s sweeping “Liberation Day” duties which were ruled unlawful by the Supreme Court in February.
The Office of the US Trade Representative is conducting another Section 301 investigation into structural excess capacity, under which Bloomberg previously reported Washington was considering a 7.5 per cent levy on Chinese goods.
Beijing had previously said that the US had agreed during bilateral talks to cap replacement tariffs on China at 20 per cent.
“Whether before or after January 10 next year, China is unlikely to raise its tariffs on its own accord,” said Cui Fan, a professor at the University of International Business and Economics in Beijing, in a social media post.
But if Washington’s new levies exceeded the cap that it had agreed to, China would match proportionately with new duties, Cui added.
Export controls
China’s Ministry of Commerce and its General Administration of Customs extended the suspension of six export control notices, covering strategic products such as superhard materials, rare earth elements, equipment for rare earth production and high-density lithium batteries.
Rare earths – widely used in hi-tech products ranging from electric vehicles and wind turbines to defence equipment – remain an important flashpoint in bilateral trade.
Crucially, the reprieve also extended to Beijing’s proposed extraterritorial rules, which would subject foreign-made goods containing Chinese-origin rare earths to Chinese export licensing rules.
Separately, the commerce ministry extended the suspension of measures prohibiting the export of dual-use items to 16 US entities, primarily defence and intelligence contractors.
The US Department of Commerce’s Bureau of Industry and Security continued to suspend its “affiliates rule”, which would have expanded export control measures to foreign companies that were at least 50 per cent owned by entities on its blacklists.
Sanctions
Beijing continued to pause enforcement of sanctions on the 11 US companies added to its Unreliable Entity List, operating in sectors such as drones and autonomous systems manufacturing. Under the waiver, Chinese firms may continue to apply for approval to transact with the listed businesses.
China’s commerce ministry also renewed a suspension of sanctions against five US-based subsidiaries of South Korean shipbuilder Hanwha Ocean.
The units were targeted in October last year for assisting Washington’s Section 301 investigation into the Chinese shipbuilding industry, a dispute that also saw both sides introduce steep retaliatory port fees.
As part of the trade truce extension, both Beijing and Washington have extended their suspension of the port fees. China’s transport ministry also noted that it would continue to pause an investigation into shipbuilding and the industry’s supply chain. -- SOUTH CHINA MORNING POST
