China Signals Openness to Extending Tariff Truce as High-Level Talks Continue

China's trade representative has signaled openness to extending the current tariff suspension with the U.S., aiming to de-escalate tensions and maintain stability ahead of a planned presidential summit.

This move follows a period of de-risking that has already seen a significant drop in bilateral trade, making the economic cost of re-imposing tariffs high for both nations.

The continued truce provides crucial negotiating space and predictability for supply chains, with both sides now focused on reaching a more stable agreement before key policy deadlines, such as the November 2026 expiration of certain U.S. tariff exclusions.

China has signaled it is open to extending the current suspension of tariffs with the United States, a crucial move to maintain stability in the global economy.

This announcement comes as high-level talks are underway in Paris, setting the stage for President Trump’s planned visit to Beijing at the end of March. The immediate goal is clear: de-escalate tensions and avoid a sudden 'tariff snapback' that would disrupt supply chains and impose massive costs on businesses. Both sides are keen to create a positive atmosphere for the upcoming summit.

To understand today's development, we need to look back at the events of 2025. First, the year began with a sharp escalation of reciprocal tariffs, causing significant economic pain. Second, this pain led to a truce, initially structured as rolling 90-day pauses. Third, by late 2025, this evolved into a more stable, year-long suspension framework following a meeting between the two presidents. This established a pattern of 'extend-and-negotiate' that continues today.

The economic reasons for extending the truce are compelling. Recent data shows that U.S. goods imports from China fell nearly 30% in 2025, and the bilateral trade deficit shrank to its lowest level in years. Container shipping volumes from China also remain well below previous levels. This 'de-risking' means that trade flows are already compressed, so re-imposing high tariffs—potentially adding over $6 billion in duties per month—would be a shock that neither economy wants to absorb.

Furthermore, there's a firm policy deadline anchoring these talks. Last November, the U.S. Trade Representative (USTR) extended tariff exclusions on 178 product lines until November 10, 2026, under its Section 301 investigation. This date serves as a critical milestone, and China's signal of flexibility is a strategic step aimed at influencing the negotiations leading up to it.

In essence, the Chinese negotiator's comment is more than just diplomatic talk. It is a logical continuation of a year-long de-escalation strategy, reinforced by economic data and aimed at securing a predictable trade environment ahead of a pivotal leadership meeting.

Tariff Snapback: The sudden re-imposition of tariffs that were previously suspended, which can cause abrupt cost increases and supply chain disruptions.
De-risking: A strategy where companies and countries reduce their dependence on a single source or nation (in this case, China) for manufacturing and supply chains to mitigate economic and geopolitical risks.
Section 301: Part of a U.S. trade law that allows the U.S. Trade Representative (USTR) to investigate and take action against foreign trade practices deemed unfair or harmful to American commerce. It was the basis for many tariffs imposed on China.

China Signals Openness to Extending Tariff Truce as High-Level Talks Continue

This move follows a period of de-risking that has already seen a significant drop in bilateral trade, making the economic cost of re-imposing tariffs high for both nations.

China has signaled it is open to extending the current suspension of tariffs with the United States, a crucial move to maintain stability in the global economy.

Tariff Snapback: The sudden re-imposition of tariffs that were previously suspended, which can cause abrupt cost increases and supply chain disruptions.
De-risking: A strategy where companies and countries reduce their dependence on a single source or nation (in this case, China) for manufacturing and supply chains to mitigate economic and geopolitical risks.
Section 301: Part of a U.S. trade law that allows the U.S. Trade Representative (USTR) to investigate and take action against foreign trade practices deemed unfair or harmful to American commerce. It was the basis for many tariffs imposed on China.