China Trade Deal Deadline Extended to Early November

President Donald Trump hasn’t said for sure whether the pause on China’s tariffs will be extended. (Getty Images)

President Donald Trump has extended the trade truce with China through Nov. 9.

That means the tariff rate on imports from China will remain at 30%, rather than boomerang up to a higher level as it would have if no deal had been struck by Tuesday.

“I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days,” Trump said in a social media post. “All other elements of the Agreement will remain the same.”

The White House released the text of the executive order Trump signed late on Monday.

“We hope that the U.S. can work with China to continue adhering to the important consensus reached by the two heads of state during their phone talks,” Liu Pengyu, a spokesman for the Chinese embassy in Washington, said in a statement sent after this article was published.

The two countries’ use of export controls has been a flashpoint in the talks. “The U.S. is abusing export controls to suppress China,” Liu said of Washington’s controls on high-end chips used in artificial intelligence applications. China’s own restrictions on rare earth exports to the U.S. are done in “in accordance with international practices and domestic laws and regulations,” Liu said.

Gold to Be Exempt From Tariffs, Trump Says

President Trump is exempting gold from tariffs, he wrote in a post on Truth Social Monday.

That is good news for Switzerland, the world’s largest gold refining center, which is already facing tariffs of 39% on its imports to the U.S.

Gold futures had surged 1% Friday when U.S. Customs and Border Protection said in a letter that one kilogram and 100-ounce gold bars would be tariffed. They settled 2.5% lower Monday at $3,491, but that was before Trump made his announcement.

Why the U.S.-China Tariff Deadline Extension Is Coming Down to the Wire

President Donald Trump told reporters Monday morning that “we’ll see what happens” when asked whether he will give China another extension to work out a deal on trade.

“We’ve been dealing very nicely with China as you probably have heard. They have tremendous tariffs that they’re paying to the United States of America,” Trump added.

Trump and White House officials have been saying for weeks that they probably would extend the Aug. 12 tariff deadline on China. Analysts say the administration is still trying to gain ground.

Since U.S. and Chinese officials met in Geneva in May, tariffs on most Chinese imports have been about 30%, down from as much as 145% before the pause. That is on top of the 25% from Trump’s first term that is still in place on many goods. The former rate is set to rise another 34% on Tuesday if no extension is granted.

Wall Street widely expects an extension. But Paul Triolo, partner at geopolitical consultancy Albright Stonebridge Group, says there appears to still be wrangling behind the scenes to get something more, from increased agricultural purchases to continued back and forth on export restrictions that are limiting China’s access to critical technology and China’s hold on rare earth minerals like magnets.

On Monday, Trump said in a social media post that China should quadruple its purchases of soybeans. The country’s agricultural purchases from the U.S. have been down 50% over the past six months.

Tied up in the trade negotiations is the back and forth over unresolved issues related to China’s access to critical semiconductor technology, including AI chips. The White House confirmed on Monday the details of an unprecedented revenue-sharing pact that allows Nvidia and AMD to sell certain GPU chips to China. More details on that in the section below.

“The Trump administration wants to avoid the appearance that it is walking back controls on AI hardware without some major concessions from both Beijing on rare earths, and from industry, but the revenue issue with Nvidia and AMD would set a potentially dangerous precedent, even for a transactional leader such as President Trump,” Triolo says. “The recent churn around the H20 and the potential revenue sharing agreement means we are in a whole new world in the US China AI race.”

The widespread consensus is that the U.S.-China tariff deadline will be extended since raising tariffs on China would equate to a trade embargo—the kind that rattled markets in April and eventually led to the truce with China. Henrietta Treyz, director of economic policy research at Veda Partners, says such a move would likely push companies to accelerate efforts to re-route trade through other destinations and raise inflation risks stateside, not to mention spoil the chances of a summit between Trump and Chinese leader Xi Jinping this fall.

The current expectation among investors and those in Washington, D.C., is also that Trump “will once again punt on extracting material concessions, and as the Nvidia and AMD ‘deal’ illustrates, will once again allow the flow of previously considered national security assets to China,” Treyz adds.

Nvidia, AMD to Pay U.S. a Share of Chip Sales to China

Semiconductor makers Nvidia and AMD have agreed to pay the U.S. government 15% of revenues from certain chip sales to China.

Trump confirmed Monday that Nvidia will pay the U.S. 15% of its proceeds from Chinese sales of its H20 chip. He didn’t specifically address the deal with AMD, which The Wall Street Journal and other media outlets reported, citing people familiar with the situation. AMD didn’t respond to requests for comments.

Trump told reporters Monday that Nvidia’s H20 semi was an old chip that China already has in a different form. He also mentioned a more advanced Blackwell chip. “The Blackwell is super, duper advanced. I wouldn’t make a deal with that. Although, it’s possible I’d make a deal, a somewhat enhanced, in a negative way.”

Goldman Says Consumers Will Soon Feel More Pain

Meanwhile, Trump’s new tariff regime is having an effect on the economy. Strategists at Goldman Sachs led by Jan Hatzius said that U.S. consumers had only absorbed 22% of the tariff costs through June, but that their share would soon rise to 67% if recent tariffs follow the same pattern as earlier ones. U.S. businesses have absorbed more than half of the costs so far, but that share is set to drop to less than 10%, they said in a note published Sunday.

Finally, foreign exporters have absorbed 14% of the tariff costs so far but that could rise to 25%, they added.

Write to Anita Hamilton at anita.hamilton@barrons.com, Reshma Kapadia at reshma.kapadia@barrons.com and Brian Swint at brian.swint@barrons.com