A trade truce between the United States and China is set to expire on Tuesday if the two countries do not extend the time for talks or reach a last-minute agreement that would prevent President Trump from reimposing sharply higher tariffs on Chinese imports and the Chinese retaliating against American goods.
Top economic officials have been working to finalize a provisional agreement to extend the truce that was reached during meetings in Sweden last month. After the talks, Mr. Trump’s advisers were optimistic that the president would sign off on the arrangement, but thus far he has not publicly granted China an extension. If the tariffs snap back into place, it would escalate a trade war between the world’s two largest economies that rattled global markets earlier this year.
With the clock ticking, Mr. Trump on Sunday night called on China to quadruple its purchases of American soybeans and noted that doing so would help reduce America’s trade deficit with China.
“China is worried about its shortage of soybeans,” Mr. Trump wrote on Truth Social in a message directed to Xi Jinping, China’s leader. “Our great farmers produce the most robust soybeans.”
The United States and China have held three formal rounds of trade talks this year, after Mr. Trump started ratcheting up tariffs on Chinese imports. U.S. tariffs on Chinese goods ultimately reached 145 percent, and China curbed the exports of rare earth magnets that are critical to American manufacturers. In an effort to de-escalate the tension, a 90-day truce was reached under which the U.S. reduced its China tariffs to 30 percent while China lowered its tariffs on U.S. goods to 10 percent and agreed to export the magnets.
Following talks in Sweden in late July, Mr. Trump’s economic advisers exuded optimism that another 90-day extension would be granted. Jamieson Greer, the United States Trade Representative, said that U.S. tariffs on Chinese imports could increase to 80 percent in the absence of an agreement, but Treasury Secretary Scott Bessent downplayed that possibility, suggesting that only technical details needed to be addressed.
The scope of the talks have broadened beyond tariffs. Mr. Bessent has said that he was pressing his Chinese counterparts on American concerns about China’s excess manufacturing capacity and its purchases of oil from Russia and Iran.
American and Chinese officials have been negotiating over U.S. export controls of microchips that China needs to power artificial intelligence systems.
Despite the Trump administration’s national security concerns over the trade in semiconductors and other products, it has taken a transactional approach to negotiations. Nvidia and Advanced Micro Devices are expected to pay the United States 15 percent of the money they generate from selling A.I. chips to China, as part of a highly unusual financial agreement with the Trump administration.
The trade talks with China have been on a separate track from negotiations that the Trump administration has been having with other trading partners. This month, the United States announced a flurry of trade deals, with Japan, South Korea and the European Union making big U.S. investment commitments in exchange for lower tariff rates.
At the same time, Mr. Trump continues to deploy tariffs as a tool to address virtually any diplomatic issue. Last week, he doubled tariffs on goods from India, to 50 percent, in part because India refused to curb purchases of Russian oil. The Trump administration has so far refrained from imposing such tariffs on China, which also buys Russian crude.
Vice President JD Vance said on Fox News on Sunday that tariffs on China linked to Russian oil purchases are “on the table,” but that Mr. Trump has yet to make a decision on the matter because of the complexity of the relationship.
Washington and Beijing reached a broad trade agreement during Mr. Trump’s first term that included commitments from China to buy billions of dollars worth of U.S. farm products. However, China didn’t follow through on that agreement as the Covid-19 pandemic set in, and relations between the two countries frayed.
Mr. Trump has maintained that he is open to meeting with Mr. Xi, but said last week that he would only do so if the two countries reached a trade pact.
“He asked for a meeting, and I’ll end up having a meeting before the end of the year most likely, if we make a deal,” Mr. Trump said of Mr. Xi on CNBC last week. “If we don’t make a deal, I’m not going to have a meeting.”
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
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