US and China extend 'trade truce' in tandem...tariff and sanctions suspensions extended through January next year

[Financial News] Ahead of the Asia-Pacific Economic Cooperation (APEC) summit in mid-month, the United States and China have extended by two months, through January next year, the suspension of key retaliatory measures, including the high tariffs and export controls they had imposed on each other. The move follows the two countries’ agreement in September to extend their “trade truce” and is seen as an effort to curb unnecessary economic tensions ahead of a meeting between their leaders.

The Office of the United States Trade Representative (USTR) announced on the 9th (local time) that it would extend until January 9 next year 178 exclusions from additional tariffs on Chinese products. These comprise 164 existing tariff exclusions and 14 measures related to solar manufacturing equipment.
The USTR also extended until January 9 next year the suspension of countermeasures under Section 301 of the Trade Act of 1974 targeting China’s shipping, logistics and shipbuilding industries. The USTR said, “During this period, we will negotiate with China on issues related to the investigation and continue discussions with allies on reviving the US shipbuilding industry.”

China, too, quickly announced a series of extensions to suspensions in response. In a notice issued on the 9th, the Customs Tariff Commission of the State Council said it would extend by two months, until January 10 next year, the suspension of 24% additional tariffs on US imports, which had been due to expire on the 10th. The existing 10% additional tariff will remain in place.
China’s Ministry of Commerce and the General Administration of Customs also postponed until January 10 next year the implementation of tighter export controls on strategic minerals, including rare earths, synthetic diamonds and key battery materials such as lithium and graphite.
A particularly notable move is the suspension of sanctions targeting companies. China’s Ministry of Commerce extended by two months the suspension of transaction-ban sanctions imposed on five US subsidiaries of Hanwha Ocean, including Hanwha Philly Shipyard in Philadelphia, for cooperating with a USTR investigation. It also suspended sanctions imposed during the tariff war on around 20 US defense and logistics companies, including Skydio. China’s Ministry of Transport likewise decided, in line with an agreement reached last month, to suspend special port usage fees on US ships until January 10, 2027.

The coordinated suspensions by the two countries are seen as a move to foster a friendlier atmosphere ahead of a summit between US President Donald Trump and Chinese President Xi Jinping on the sidelines of the APEC summit, to be held on the 18th and 19th in Shenzhen, Guangdong Province, China.
However, the underlying tensions remain. The Customs Tariff Commission of the State Council said it was “watching the US plan to replace tariffs based on the International Emergency Economic Powers Act (IEEPA) with tariffs under Section 301 of the Trade Act of 1974,” and warned that it would “closely monitor subsequent US actions and adjust retaliatory tariffs as appropriate depending on the circumstances,” signaling that it remained on alert.


[email protected] Park Ji-hyun Reporter