The United States and China have extended their trade truce for another 90 days, staving off a fresh tariff escalation between the world’s two largest economies. President Donald Trump signed the executive order on Monday, while Beijing simultaneously confirmed the pause, allowing negotiators more time to bridge differences on market access, industrial policy, and technology restrictions.

Sean Stein, president of the U.S.-China Business Council, called the extension “critical” for securing an agreement that would improve U.S. companies’ access to China’s markets and provide planning certainty. Both sides hope to build on a June deal in which the U.S. eased export controls on chip technology and petrochemical feedstocks, and China agreed to loosen restrictions on rare earth exports.

Officials are also discussing measures to curb the flow of fentanyl precursors to the U.S., an issue Trump has linked to tariff reductions.

From Tariff War to Truce

The extension follows a turbulent period in U.S.-China trade relations, including threats of tariffs as high as 145% on Chinese goods and 125% on U.S. exports earlier this year. A May agreement in Geneva brought those down to 30% and 10% respectively, preventing a near-total collapse in bilateral trade.

Trade analysts say the latest pause underscores the limits of unilateral U.S. tariff leverage and signals Beijing’s confidence in its own countermeasures, including rare earth export controls.

Experts caution that the truce does not address structural disputes over Chinese subsidies, industrial policies, and intellectual property protections. “The trade war will continue grinding ahead for years,” said Jeff Moon, a former U.S. trade official, predicting only limited deals such as commitments to buy U.S. soybeans or maintain rare earth supplies.