Expanding the truce

The US and China have not yet announced its expansion to their tariff period, and the tension on several thorny issues is increasing again, as is the weak truce approaching its expiration.

After the last bilateral meeting in Stockholm in July, Beijing applied an optimistic tone, saying that both sides would be Work on expanding the tariff truce Another 90 days.

However, the US negotiators have invested the ball in the court of President Donald Trump to extend the tariff truce. Trump, so far, has proposed little instructions for whether he would go to expand, causing the problems that the tensions between the two largest economies of the world could increase again.

In May, both sides agreed on a 90-day tariff truce, which reduced the duties of not duty 145% in April, as well as stopping a number of punitive measures, which allowed to hold a place for further negotiations to reach a long transaction. Which agreement set up on Tuesday.

Currently, US -related China is facing a 20% tariff associated with the country’s alleged role in the US stream in the US and 10% basic tariffs drawn up on top A 25% duty on certain goods imposed during Trump’s first term. American goods to China are subject to over 32.6% tariffs Institute of International Economy Peterson.

The US Department of Trade Representative and the Chinese Foreign Ministry did not respond to CNBC requests.

While the official expansion of the tariffs is still hanging in equilibrium, experts expect that in the coming months Beijing will occur between Trump and Si.

“This provides for a more stable US-China’s relationship … But by no means is no more friendly,” said Jan Bremmer, the president and founder of the Eurosia group, noting that both sides are “structurally sent to the junction as a consequence of the new global trade and geopolitical environment.”

The July trading data of China showed their exports to the US for the fourth consecutive month, Drop on 21.7% compared to a year earlier. According to wind information, deliveries in May sank high since the beginning of the pandemic.

A potential trading transaction can be provided by China, which makes purchasing US goods, in particular energy, agricultural goods, and if the US has allowed it, semiconductors and chips, Julian Evans-Prechard, head of the Chinese economy, said.

General import of China from the USA decreased by 10.3% During the period of January -July.

The final transaction can accept different forms, said Evans-Prechard, noting that one of the most likely results will be “continuation” The Phase Agreement was signed in January 2020.

At the time China agreed on Increase by $ 200 billion In the annual purchases of American goods and services compared to the level of 2017, the purpose that Beijing did not meet as a result when the pandemic violated trade.

“It is likely that Trump can consider the transaction of the first stage as an unfinished business by refining it even higher purposes,” Evans-Prechard added.

In the message on Truth Social Sunday nightTrump said he hoped China “will be four times soon”. In recent months, China has increased the procurement of soybean, and in May, June and July, respectively, imports increased by 36.2%, 10.4% and 18.4% respectively.

China’s total exports to the United States decreased by 12.6% this year as of July. However, this is largely offset by the growth of exports by 13.5% to the countries of Southeast Asia, attracting attention to the so-called “transition” of goods.

Trade experts warn that the export-critical growth driver of China-can slow down in the coming months, as Trump charges 40% of the tariff for goods, directed through other countries, although providing little clarity over how these deliveries will be determined.

The tensions between the US and China on semiconductor export control have also increased in recent weeks, even if Nvidia plans Restore the Hip H20 sales to ChinaExport control control over H20, imposed by Trump in April.

Recovery H20 signals a “modest correction of the course rather than a strategic shift,” said Gabriel Widow, head of Tena political consultation, noting that there will be no significant loosening of export control.

In view of this, Trump may consider the possibility of concessions to control over export, which others in his administration consider “excessive” to make a deal with Beijing, added Wildau.

The H20 sales recovery occurs when national security hawks in the Trump administration warn that US chips and other technologies can strengthen the Chinese sector II and its military. Others argue that further restrictions risk retreat and can push Beijing to accelerate efforts to develop internal alternatives and reduce dependence on US suppliers.

Chinese officials have pushed the United States to facilitate control over exports on a high bandwidth chip capacity to China banned by former President Joe Biden in 2024-messages Financial Times on Sunday. Nvidia and Amd Agree to give the US government 15% of its income from chips to China to provide export licenses, Reported about Financial Times.

“What we see is essentially the monetization of the US trade policy, in which US companies have to pay the US government for export permit. If so, we have entered the new and dangerous world,” said Stephen Olson, the elder visiting the ISEAS-Yusof ISHAK and former US trading participant.

Beijing agreed to relax Export ban on rare ground metals and magnets in June And he went to the process of accelerating licensing after a number of negotiations, although there was little detail about his commitment to accelerate the supply of critical minerals.

In June, rare exports in the country worldwide increased by 60% to 7,742 metric tons, the highest since January 2012, according to wind information, before decreasing to 5.994.3 metric tons in July.

In June, China’s exports of rare and earthly magnets in the US jumped over seven times From the previous month, when US companies received about 353 metric tons of permanent magnets in June, according to official customs data. A similar showdown, characteristic of the country, will be released on August 20.

China was the largest buyer of Russian oilfollowed by India, which saw that tariffs doubled 50% last week.

Asked if he believes he would punish China for the same reason, Trump said, “I can’t say yet. But I can – we’ve done it – we’ve done it with India. We’re doing it probably with a couple of others. One of them can become China.”

The total import of China from Russia increased higher in July to $ 10.06 billion, which is the highest level since March, although this year by 7.7% compared to the same period of 2024, according to recent customs data.

On Friday, a telephone call with President Vladimir Putin, who is now in the fourth year, was held on the eve of the meeting with Trump with Trump.

The phone call with Putin looked “urgent” because it was held during the planned annual summer holidays of the XI, said the Neo van, which manages the Chinese economist at Evercore ISI.

“Both Putin would like to use his close ties in the talks with Trump, forcing him to guess what they were talking about or even agreed during their call,” Van added.