Trump Delays China Tariff by 90 Days- Is Xi Jinping Disregarding American Pressure?

On August 11, 2025 — Hours before Donald Trump’s massive tariffs for China were about to be locked in place, the chief executive delayed the imposition by 90 days. The move was a sigh of relief for many businesses as it would have effectively decimated much of the trade between the world’s two largest economies.

The markets responded immediately to this positive development as Japan’s Nikkei exchange reported a 3% recovery, while Australian markets reported new highs, and the S&P 500 experienced a slight uptick. Chinese bonds also shot up in demand because of the 90-day delay.

However, amidst this positive reaction by the markets, there is a need to step back and ask the real question: has the trade dispute been resolved? The answer is a thumping NO.

China Changes the Game

While Trump’s maximum pressure campaign to choke trade with tariffs is working with a lot of the smaller countries, China is hitting back aggressively. Beijing has worked out a new formula to force the US to remain on its toes: rare Earth metals. The country is ready to choke off the supply of these elusive materials if Trump acts on his threats to impose 145% tariffs on the country.

These elements aren’t exactly luxury items, but they remain highly in demand because of their extensive use in electronics and batteries, namely smartphones, electric vehicle battery packs, and even drones. China threatened to cut off this important supply, and the US was forced to capitulate for the time being.

For some analysts, it is a much smarter strategy than tariffs, as it can hold the entire electronics world hostage, and even a reduction in supply can send prices soaring and sales dropping massively.

Americans Will Bear the Brunt of the Trade War

The American consumers are already facing the effects of the ongoing trade war as core inflation jumped to 3.1% in July, which was already on the higher side. Factories cut 11,000 jobs last month despite the White House’s promise to usher in a new era of manufacturing in the USA.

The US Federal Reserve was therefore forced to keep the interest rate unchanged, and Chairman Jerome Powell had to withstand considerable pressure from Trump to take this sensible step.

Now, the Fed faces a difficult choice: it can either decrease the interest rate and watch inflation spiral out of control amidst a trade war, or keep rates where they are and watch the economy slow down even further.

What happened with the Chinese Tariffs?

The delay in these high tariffs wasn’t a diplomatic breakthrough, but a means to avert an imminent crisis. The US and China don’t appear ready to resolve their differences, and negotiators have returned from London and Stockholm empty-handed apart from buying more time.

Both sides are locked on their respective sides as Trump needs a win for political purposes and Xi needs low tariffs to avoid slowing China’s economy down. They have stepped back from the abyss for now, but they will be back at it soon enough.

The Real Problems Stay Put

Three important related issues have remained unresolved. They include Beijing propping up state-subsidized companies with abundantly cheap raw materials, American accusations of Chinese tech espionage, and the huge trade gap between the two countries.

Trump wants China to agree to a balanced trade situation, but Xi understands that the foreign exchange surplus is what keeps China at the top. 90 more days of this diplomatic impasse won’t change the situation drastically, that is for sure.

What November Brings

November is upon us, and with it, the stakes will be even higher. China has proved that it will be a tough nut to crack for Trump, while America is beginning to understand that it won’t be able to bully China too much because of the tight trading links between the two.

The recent celebration by top markets may be a premature one, as nothing has been resolved. November will be here in no time, and the two warring sides will be staring down at each other once again.

For now, it is a timeout, but it won’t last for long—round three beckons.

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