The extension of the American-Chinese truce is at stake while the deadline is looming

The United States and China have not yet announced an extension of its price period, with tensions on several thorny problems which extend again as a fragile truce is approaching its expiration.

After the last bilateral meeting in Stockholm in July, Beijing had brought an optimistic tone, saying that the two parties would work to extend the pricing truce of an additional 90 days.

The American negotiators, however, had put the ball in the court of President Donald Trump to extend the price price. So far, Trump has given few sites to know if he will go for an extension, worrying that the tensions between the two biggest economies in the world could go up.

In May, the two parties agreed with a 90 -day pricing truce which reduced the functions of 145% prohibitive in April while stopping a series of punitive measures, allowing additional negotiations to achieve a lasting agreement. This agreement is expected to expire on Tuesday.

China’s expeditions to the United States are currently faced at a tariff of 20% linked to the country’s alleged role in the Fentanyl flow in the United States and a reference rate of 10%, stacked in more than 25% on certain goods imposed during Trump’s first mandate. American products in China are subject to more than 32.6% prices, according to the Peterson Institute for International Economics.

The United States office, commercial representative and Ministry of Foreign Affairs of China, has not responded to requests for comments from CNBC.

While an official tariff extension is still at stake, experts are largely expecting a summit between Trump and Xi will take place in Beijing in the coming months.

“This implies a more stable American-Chinese relationship … but in no way more user-friendly,” said Ian Bremmer, president and founder of Eurasia Group, noting that the two parties “are structurally directed towards decoupling of the new world trade and the geopolitical environment”.

Despite the pricing truce, trade between Washington and Beijing was considerably affected.

The commercial data of July in China has shown that its exports to the United States decreased for a fourth consecutive month, down 21.7% compared to the previous year. The shipments in May have been poured as much as possible since the start of the pandemic, according to data from the wind information.

A potential trade agreement could imply that China undertakes to accelerate purchases of American products, in particular energy, agricultural products, and if the United States has enabled it, semiconductor and control equipment, said Julian Evans-Pritchard, Chief of the Chinese economy in capital economics.

Global imports from China from the United States dropped by 10.3% during the period from January to July.

The final agreement could take various forms, said Evans-Pritchard, noting that one of the most likely results would be a “continuation” of the phase 1 agreement signed in January 2020.

At that time, China had accepted an increase of $ 200 billion in annual purchases of American goods and services compared to the 2017 levels, a goal that Beijing ultimately did not reach the Pandemic trade.

“It is plausible that Trump can deal with phase agreement one as an unfinished company, reorganizing it with even higher purchase objectives,” added Evans-Pritchard.

In an article on Truth Social Sunday Night in the United States, Trump said that he hoped that China “quickly quadruple his soy orders”. China has increased soy’s purchases in recent months, import volumes increasing by 36.2%, 10.4% and 18.4% in May, June and July, respectively, according to Wind Information.

Total China exports to the United States fell 12.6% this year in July. However, this has been largely offset by export growth of 13.5% to the nations of Southeast Asia, carrying out a meticulous examination on the so-called “transbrication” of goods.

Commerce experts have warned that exports – a critical growth engine for the Chinese economy – could slow down in the coming months when Trump takes a 40% tariff on third countries, although it does not know how these shipments would be defined.

Tensions between the United States and China on semiconductor export controls have also increased in recent weeks, even if NVIDIA plans to resume sales of its H20 chip, overthrowing export controls on H20 sales imposed by Trump in April.

The resumption of the H20 reported a “modest course correction rather than a strategic change,” said Gabriel Wildau, director general of the Teneo political consulting company, noting that a substantial export control of export control will not occur.

That said, Trump can consider providing concessions on export controls that other members of his administration consider “excessive” to conclude an agreement with Beijing, added Wildau.

The resumption of H20 sales intervenes while national security hawks in the Trump administration warn that American fleas and other technologies could strengthen the Chinese AI sector and its soldiers. Others argue that new restrictions are likely to return from fear and could encourage Beijing to accelerate efforts to develop domestic alternatives and reduce dependence on American suppliers.

Chinese officials have prompted the United States to facilitate export controls on large bandwidth memory fleas – whose shipments to China were prohibited by former President Joe Biden in 2024 – The Financial Times reported on Sunday. Nvidia And Dmla agreed to give the American government 15% of their income from flea sales to China in order to guarantee export licenses, Financial Times reported.

“What we see is in fact the monetization of American trade policy in which US companies must pay the US government to export. If this is the case, we have concluded a new and dangerous world,” Stephen Olson, a senior visiting researcher at ISEAS-YUSOF Ishak Institute and former American commercial negotiator, told Stenior.

The lever effect that Beijing rushes through its domination of rare earths could be an additional factor pushing Trump to offer concessions – and a card that Beijing will use almost certainly, according to experts.

Beijing has agreed to relax its export ban on rare land metals and magnets in the United States in June and moved to accelerate the license process after a series of negotiations, although few details have been made available to its commitment to accelerate the expeditions of critical minerals.

In June, exports of the country’s rare earths increased globally by 60% to 7,742 metric tonnes, the highest since January 2012, according to data on wind information, before moving to 5,994.3 metric tonnes in July.

Chinese exports of rare land magnets to the United States in June jumped more than seven times compared to the previous month, American companies receiving around 353 metric tonnes of permanent magnets in June, according to official customs data. A similar distribution specific to the country will be published on August 20.

Another thorny question in the American-Chinese negotiation is the threat of Trump to punish Beijing with additional prices on his Russian oil purchases.

China was the largest Russian oil buyer, followed by India, who saw the American rates doubled at 50% last week.

Answering a question to find out if he was planning to penalize China for the same reason, Trump said: “I can’t tell you yet. But I can – we did it with – we did it with India. We are probably doing with a few others. One of them could be China.”

Global imports from China from Russia increased in July to $ 10.06 billion, the highest level since March, although 7.7% decreased this year compared to the same period in 2024, according to the latest customs data.

On Friday, XI held a phone call with President Vladimir Putin before the Russian leader meeting with Trump on Russia-Ukraine who is now in his fourth year.

The telephone call with Putin seemed to be “urgent” because it occurred during the expected annual summer holidays in XI, Chinese economist in Evercore ISI said.

“XI and Putin would like to take advantage of their close ties in negotiations with Trump by giving him guessing what really talked or even agreed during their appeal,” added Wang.