U.S. says it won't rush to extend trade truce with China

Scott Bessent said on May 19 that Washington is “not in a rush” to extend the U.S.-China trade truce that expires in November, signaling the Trump administration is willing to let the deadline approach before deciding whether to preserve the deal. Reuters reported that Bessent said there was still time to renew the arrangement in meetings later this year and that current trade conditions remained stable. China, by contrast, is pressing to keep the truce in place and to lock in clearer limits on future U.S. tariffs. Bloomberg reported that Beijing is prepared to accept some increase in U.S. tariffs, but only up to levels agreed in talks in Kuala Lumpur last year, rather than a return to open-ended escalation. (finance.yahoo.com) The gap between those positions explains the current phase of the relationship: the United States is treating the truce as leverage, while China is seeking predictability more than a full reset in economic ties. Reuters said the truce also covers critical minerals and was negotiated after tariffs on both sides rose to triple-digit levels before being pulled back. (bloomberg.com) ### Why is Washington not moving now? Bessent told Reuters in Paris that the administration was not hurrying because the agreement does not expire until November and could be addressed in later meetings. He said the existing arrangement had helped avert a broader collapse in trade between the world’s two largest economies. (finance.yahoo.com) The current U.S. tariff structure also gives Washington room to wait. Reuters reported that the truce reduced additional tariffs on Chinese goods to about 20%, while leaving in place earlier first-term duties of about 25% on many industrial products and 7.5% on some consumer goods imposed in 2019. (finance.yahoo.com) That means the White House is negotiating from an already elevated tariff baseline, not from pre-trade-war levels. Reuters described the truce as having pulled both sides back from triple-digit tariffs rather than dismantling the broader tariff architecture. ### What exactly is Beijing asking for? (usnews.com) Bloomberg reported that China wants future U.S. Section 301 tariffs capped at the levels discussed in Kuala Lumpur. That would set an upper bound on tariff pressure instead of leaving Beijing exposed to another rapid escalation. (usnews.com) China’s commerce ministry has also said planned tariff cuts would cover at least $30 billion of goods on each side, according to Euronews. In the same account, an unnamed ministry official said Beijing hoped the United States would “honour its commitment” from the latest round of negotiations and support an extension of the truce reached last year. (bloomberg.com) ### How much de-escalation is actually on the table? CNBC reported earlier that the two sides agreed in May to suspend most tariffs for 90 days, cutting reciprocal tariffs from 125% to 10%, while leaving in place a separate 20% U.S. levy tied to fentanyl. That left total U.S. tariffs on Chinese goods at 30% under that framework. (euronews.com) Reuters’ description of the current arrangement is consistent with that structure: lower emergency tariffs, but a large body of older duties still intact. The result is a partial rollback, not a dismantling of the trade war. ### Is either side trying to restore the old trade relationship? Foreign Policy reported that U.S.-China trade has already contracted sharply since 2017 and that both governments are building mechanisms to manage a more strategic relationship. (cnbc.com) Bloomberg’s account of Beijing’s position suggests China is seeking a stable ceiling on tariffs rather than a return to pre-2017 openness. (finance.yahoo.com) The next formal decision point is November, when the current truce expires. Reuters said Bessent expects the issue to be taken up in later meetings this year, and Bloomberg reported that Beijing wants those talks to extend the arrangement on terms closer to the Kuala Lumpur framework. (finance.yahoo.com) (foreignpolicy.com)