Despite warnings last week from the U.S. Treasury Secretary and U.S. Trade Representative to Chinese leaders about keeping promises made under a 2025 trade agreement, both nations have agreed to further extend their trade truce into early 2027.
The Busan Agreement, reached by President Donald Trump and Chinese President Xi Jinping in South Korea last October, paused certain trade penalties and restrictions. It originally was set to expire in November. After Xi visited Washington in September, both countries agreed to extend the pause until January.
- China will pause an additional 24% tariff on U.S. goods that was to take effect on Tuesday, although a 10% blanket tariff remains.
- The U.S. will maintain 10% tariffs on imports from China (reduced from 20% as part of the extension) and extend current Section 301 tariff exclusions for Chinese goods.
- Both countries will continue to suspend special port fees on vessels from the other nation.
- Trump says he and Xi plan to meet in China later this month and again at the December G20 Summit in Miami.
ICYMI: USTR Proposes $1.5 Million Fee For Chinese-Made Ships In US Docks
The official pause comes as welcome news to importers and exporters on both sides of the Pacific. However, both countries have taken other steps that could increase tensions over the next two months. The U.S. has blocked imports from additional Chinese companies and ratcheted up tariffs over suspected forced labor, while China announced plans for tighter export controls for AI products.
A wide variety of U.S. industry advocacy groups – including PPAI – have voiced serious concerns about expected impacts of these fees, including increased costs and supply chain disruption. PPAI has taken three specific actions on this issue in the past two months:
- PPAI signed a coalition letter requesting extended suspension of the Section 301 China-built vessel fees. That letter was send to USTR and the departments of Commerce, Treasury and Transportation, as well as key congressional committees.
- PPAI also sent its own letter to USTR sharing new figures from our global economic impact study and describing potential impacts of the fees on the branded merchandise industry.
- PPAI signed an additional coalition letter to USTR in October in response to the agency’s request for comment regarding the additional two-month suspension.
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PPAI will continue advocating with the broader coalition on the Section 301 vessel and port fees issue, as well as conducting our own trade advocacy and engagement.
