The US and China are approaching a deadline at midnight for increased tariffs, even as President Donald Trump's administration hints a 90-day extension of lower rates is likely.
The US currently imposes a minimum tariff rate of 30pc on China, while China has put retaliatory tariffs of 10-15pc on most energy and agricultural commodities from the US. Trump earlier today hinted a potential extension of a tariff pause because of progress in talks with Chinese president Xi Jinping.
"We'll see what happens," Trump said earlier today. "They've been dealing quite nicely. The relationship is very good with President Xi and myself."
Last week, US commerce secretary Howard Lutnick said it "feels likely" there will be an agreement between the US and China to extend the pause on higher tariffs for 90 days. China's foreign ministry earlier today declined to comment on the looming tariff increase, but said it hopes the US would "work for positive outcomes on the basis of equality, respect and mutual benefit."
China is the US' third-largest trading partner, which last year imported $439bn of goods from China and exported $143bn. Trump increased tariff rates on dozens of countries last week, but has yet to further increase tariffs on China, even as he prepares to double tariffs on India to 50pc on 27 August.
The existing minimum 30pc tariff on China is already stacked on other "sectoral" tariffs, pushing the effective tariff on Chinese imports to 41pc, credit ratings service Fitch Ratings said in a report on 1 August. Absent an extension of the tariff pause, the US will increase its minimum tariff on China to 54pc for goods loaded onto ships on or after 12:01 am ET on 12 August, pushing up the cost of goods ahead of the holiday season.
Trump last week threatened that China could be subject to additional "secondary" tariffs for its purchases of Russian oil, but so far has only put that penalty on India. US vice president JD Vance said on 10 August that Trump was still "reviewing his options" but said putting secondary tariffs on China would be "a little bit more complicated" because of broader trade issues.
