Trump Delays China Tariff Hike With 90-Day Extension

China is viewed by many as the “world’s factory.” Many companies choose to make their products in China due to more affordable labor, but that is expected to change. This is because of Trump’s proposed tariffs, which would have slapped a 30% tax on goods imported from China. However, companies can breathe a temporary sigh of relief as Trump delays the tariff on China.

Trump delays tariff on China

The Trump administration and China had a temporary agreement, which would lower tariffs from 145% to 30%. However, this agreement would have expired on August 12. But it seems that hours away from this deal expiring, Trump announced an extension of 90 days as he delays the tariff on China once again.

This means that companies in the US that rely on China for their products won’t be hit with 145% tariffs. They’ll still pay a 30% tariff, which is high compared to other countries, but it is a better alternative. China, on the other hand, will also lower its tariffs on US imported goods from 125% to 10%.

This is good news for many companies, especially tech companies, that source a variety of components from China. This includes Apple, which famously relies on China to manufacture and assemble its iPhones and other products. However, even though Trump has delayed the higher tariffs, Apple, for the most part, has escaped.

This is because of Apple’s commitment to invest more in the US market. Plus, Trump has stated that companies that build in the US or commit to build in the US can escape tariffs like the ones imposed on semiconductors.

Not out of the woods yet

That being said, companies shouldn’t be too eager to celebrate just yet. Trump has gone back and forth when it comes to tariffs and has been known to change directions on a whim. Also, we’re not sure how future discussions between the Trump administration and Chinese officials will turn out.

If things take a turn for the worse, we could be looking at even higher taxes. Not to mention, there is the elephant in the room: TikTok. Trump has been trying to find a US buyer for TikTok. However, there is resistance from the Chinese government to selling. One of the reasons for the tariffs was to persuade China to allow the sale to go through.

However, until now, that hasn’t happened yet.