China extends tariff suspension on US goods, keeps 10% levy

This development reduces risk for markets. Removing the threat of a sudden tariff increase provides some support for a market unsettled by the AI sell-off and the escalation in the Middle East over the weekend. It should provide a lift for equities, the yuan and currencies sensitive to China such as the Australian dollar. However, it represents continuity rather than new stimulus, so the gains are likely to be limited unless next week's APEC summit brings more. Agricultural markets, especially soybeans, will watch for signs that the truce includes purchase commitments.

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Beijing has extended its tariff truce with Washington instead of allowing it to expire, eliminating a potential trade disruption and setting a more stable backdrop for the expected meeting between Trump and Xi at APEC next week.

Summary:

• China's Ministry of Finance announced it will keep the suspension of the 24% additional tariff on US goods.
• A 10% tariff on US goods will be maintained beginning November 10.
• The previous one-year suspension, agreed upon in November 2025, was set to expire this week.
• The decision comes ahead of next week's APEC summit in China, where Trump is expected to meet Xi.
• The move maintains the current situation rather than providing additional tariff reductions.

China will maintain the suspension of a 24% supplementary tariff on US products while a 10% levy remains in place from November 10, the Ministry of Finance said Monday. This action extends a key part of the trade truce between Beijing and Washington just as the original agreement was about to expire.

The decision maintains the status quo that has been in place for the past year. China initially suspended the 24% portion of its retaliatory tariffs in 2025, keeping a 10% rate active, as part of a broader de-escalation following talks between President Xi Jinping and President Donald Trump. A year ago, Beijing extended that suspension for 12 months from November 10, 2025, meaning without a new decision the higher rate could have taken effect this week.

The extension removes that risk and indicates that both sides want to keep trade relations steady heading into next week's APEC summit in China, where Trump has said he expects to meet Xi. The timing is significant. Markets have been shaken by a sharp sell-off in AI-related stocks, fresh escalation risks in the Middle East, and the controversy around Nvidia CEO Jensen Huang, whose links to a suspected Chinese intelligence asset have introduced a new layer of sensitivity to US-China ties.

In this context, a clear signal of continuity on tariffs offers some relief for risk appetite. It lowers the likelihood of a new trade shock between the world's two largest economies and supports the outlook for bilateral trade flows at a time when China's domestic demand remains weak. Monday's inflation data showed consumer prices rising just 0.7% year-on-year while factory-gate prices jumped, highlighting Beijing's dependence on external demand.

However, the announcement does not represent a new easing. The 10% tariff remains in effect, and the duration of the suspension was not immediately disclosed.

Attention now shifts to the APEC meeting, where any progress on tariffs, technology export controls or agricultural purchases will determine whether the truce can be expanded rather than just sustained.