China Extends U.S. Tariff Suspension for Two Months

The Customs Tariff Commission of China’s State Council said the decision follows the consensus reached by the two leaders in Washington in September. It takes effect at 1:01 p.m. local time on Tuesday.

China’s transportation ministry separately extended the suspension of special port fees on American ships until Jan. 10 and will pause a related industry security investigation against the U.S. for two months. The commerce ministry said it would continue suspending some trade restrictions against U.S. entities for two months and temporarily halt countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilder Hanwha Ocean. Those decisions also take effect Tuesday.

At their September summit, Beijing and Washington agreed to extend their tariff ceasefire into early next year. The truce, first reached last October, had been due to expire Nov. 10. After Democrats’ strong win in last week’s U.S. midterm elections, some observers have questioned whether the shift in Washington’s balance of power could affect the uneasy detente between Trump and Xi.

Citi economists expect the trade status quo to hold. Affordability politics, they said, supports reciprocal tariff cuts on non-sensitive goods. “Democrats’ climate and energy agenda should also benefit China’s green-tech supply chains, if indirectly,” Citi’s Xiangrong Yu and Xinyu Ji wrote. They added that Chinese agricultural purchases could help keep the risk of tariff escalation in check as U.S. politics grow more complicated.

Economists do not expect major trade breakthroughs at the leaders’ third round of talks in Shenzhen. Attention is also turning to a possible meeting later this month between Trump, Xi and Russian President Vladimir Putin to discuss the wars in Ukraine and Iran.

In China, policymakers will set the direction for the economy at next month’s Central Economic Work Conference, as sluggish domestic demand weighs on growth. The State Council said last week it would carefully study next year’s economic work and “strengthen the continuity of policies across years.” Goldman Sachs economists said that could indicate some funding available this year will be spent early next year to support growth, with the 2026 target appearing within reach.