Analyst says Trump's trade war may lead to more reshoring in China

US Donald Trump’s trade war with China would likely see global businesses reshore back to the Asian giant even as Washington and Beijing have extended a tariff truce for another 90 days, an analyst said on Tuesday (August 12).

AI Brief

The US and China agreed to a 90-day extension of their tariff truce, preventing extreme tariff hikes.
Current tariffs remain at 30% on Chinese goods and 10% on US goods, avoiding a near trade embargo.
Experts expect further extensions until a direct meeting between Trump and Xi, as businesses brace for uncertainty.

The United States and China on Monday (August 11) extended a tariff truce for another 90 days, staving off triple-digit duties on each other's goods as U.S. retailers get ready to ramp up inventories ahead of the critical end-of-year holiday season.

China managing director at The Asia Group Han Shen Lin expected the two superpowers would continue to have an extension until Xi and Trump meet one-on-one.

"If you're looking at it purely from a cost standpoint, looking at it from the ability to create new products rapidly at a cheaper cost, then the appeal of China is going to start looking stronger over time in a world where every country is facing higher and higher tariffs and greater uncertainty," Han said.

The new order prevents U.S. tariffs on Chinese goods from shooting up to 145%, while Chinese tariffs on U.S. goods were set to hit 125% - rates that would have resulted in a virtual trade embargo between the two countries. It locks in place - at least for now - a 30% tariff on Chinese imports, with Chinese duties on U.S. imports at 10%.