Might a US-China mini thaw be underway?

ONE of the key elements of Donald Trump’s foreign policy has been concern about China’s rising power. Yet, the US president on Monday (Aug 11) extended his tariff truce with Beijing for another 90 days, raising the possibility that the two powers might potentially agree to a wider grand economic bargain in 2025 or beyond.

The executive order was signed just hours before the previous tariff pause was set to expire, providing relief to financial markets around the world. Trump had previously increased tariffs on Chinese imports to 145 per cent, with Beijing reciprocating. An initial 90-day truce in May saw the US lower its levies to 30 per cent while Beijing reduced tariffs on US goods to 10 per cent and agreed to ramp up rare earth exports.

The news comes soon after chip giants Nvidia and AMD agreed to pay the US government 15 per cent of Chinese revenues. This is part of what has been called an “unprecedented” deal to secure export licences to China.