China extends pause on 24% tariff for a year, keeps 10% duty on US goods

China on Wednesday said that it will extend the suspension of additional tariffs on American goods for one year, formalising an agreement reached last week between Presidents Xi Jinping and Donald Trump.

The leaders held talks in South Korea at the end of October, effectively prolonging a delicate trade truce after several rounds of negotiations over the past months.

According to an AFP report, citing a statement published on the Ministry of Finance website and citing the State Council, “for one year the 24% tariff on US goods will continue to be suspended, (and) a 10% tariff on US goods will remain.”

The suspension is set to take effect from November 10.

Trump also formalised a reciprocal measure on Tuesday, agreeing that Washington would reduce additional tariffs on Chinese imports from 20% to 10%, effective the same day.

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The announcement comes after months of escalating tensions between the world’s two largest economies, during which both sides imposed higher tariffs on each other’s products, at one point reaching triple-digit levels that severely disrupted trade.

China further announced on Wednesday that it would suspend related sector-specific tariffs, including additional measures targeting American farm products imposed in March.

These tariffs, aimed at punishing China over the US fentanyl crackdown, included a 15% levy on chicken, wheat, corn, and cotton, and a 10% tariff on soybeans, pork, beef, dairy, and other agricultural goods.

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The tariffs had severely affected US farmers, a key political constituency for Trump, as China had previously halted all soybean imports amid the trade dispute. Last year, more than half of US soybean exports went to China.

‘Thawing ties’

In a sign of thawing ties, Chinese vice commerce minister and key negotiator Li Chenggang hailed “important” agricultural trade links between the countries during a Tuesday meeting in Beijing with representatives from the US farming sector.

“It is hoped the United States can work with China, look at the big picture, create favourable atmosphere for pragmatic cooperation on agriculture and other areas,” Li said at the meeting, according to a Wednesday statement by China’s commerce ministry.

Beijing’s commerce ministry also announced Wednesday that it would extend suspensions to export control measures on US entities that had been implemented during the tit-for-tat escalation with Washington earlier in the year.

In another statement, the ministry said that restrictions would continue to be suspended for dozens of US defence and aerospace firms.

Those measures had been aimed at limiting US access to “dual use” items that could be used for both civilian and military purposes.

Also following talks, Beijing agreed to halt for one year restrictions on the export of rare earths technology.

Rare earths are a strategic field dominated by China and are essential for manufacturing in defence, automobiles and consumer electronics.

Washington in turn agreed to suspend for one year a move imposing “Entity List” export restrictions on affiliates of blacklisted foreign companies in which they had at least a 50 percent stake, the Chinese commerce ministry said.

The United States also said it would halt for a year measures targeting China’s shipbuilding industry that led to both sides applying port fees against each other’s ships, it said.

In turn, China would suspend its “countermeasures” after the US action, they added, for one year too.

With inputs from agencies