US and China Extend Tariff Truce Again, Triple-Digit Duties Avoided

Welcome to China In Focus, I'm Tiffany Meyer. Our top story, Beijing and Washington extending a tariff truce for another 90 days. Details on how the tariff war has narrowed the U.S. trade deficit with China. President Trump urging China to quadruple its purchases of American soya beans. What this means for broader U.S.-China trade tensions. They have bought large amounts of American agriculture products and then they will suddenly dump those products and that depresses the price. Chinese state media urging companies to avoid Nvidia's H20 chips. What does this have to do with Washington's unprecedented deal with the chip giant? China's Xi Jinping calling for unity with Brazil, aiming to resist the U.S. and pushing for a seat at the Russia-Ukraine peace talks ahead of the Trump-Putin summit. And from food delivery to battlefield strikes, drones are becoming more common in people's lives. But with China dominating the drone market, who is really leading the race? On Monday, the U.S. and China extended their tariff truce for another 90 days, staving off triple-digit duties on each other's goods. American retailers are now ramping up inventories ahead of the crucial end-of-year holiday shopping season. Here's a closer look. Beijing and Washington agreed to extend a tariff truce for another 90 days, only hours before it was due to expire Tuesday. The move staves off triple-digit duties on each other's goods, where U.S. tariffs on Chinese goods would have shot up to 145 percent and Chinese tariffs on U.S. goods would have hit 125 percent. It would have been a virtual trade embargo between the two countries. The delay buys crucial time for U.S. retailers, as imports surge for the critical end-of-year season. U.S. President Donald Trump announced on Truth Social Monday that he had signed an executive order suspending higher tariffs until November. While China's commerce ministry issued a parallel pause on extra tariffs early on Tuesday, it also suspended adding some U.S. firms it targeted in April to trade and investment restriction lists. China said the extension was, quote, a measure to further implement the important consensus reached by the two heads of state On Sunday, Trump had asked China to quadruple the soybeans it buys in a Truth Social post, but he did not repeat that demand on Monday. The two sides had announced a truce in their trade dispute in May in Geneva, Switzerland, agreeing to a 90-day period to allow further talks. They met again in Stockholm, Sweden in late July, and U.S. negotiators returned to Washington with a recommendation that Trump extend the deadline. Commerce Department data showed last week imports from China early this year surged to beat Trump's tariffs, but dropped steeply in June. The U.S. trade deficit with China tumbled by roughly a third in June to $9.5 billion, its narrowest since February 2004. Over five consecutive months of declines, the U.S. trade gap with China has narrowed by over $22 billion, a 70 percent reduction from a year earlier. Washington has also been pressing Beijing to stop buying Russian oil over Moscow's war in Ukraine, with Trump threatening to impose secondary tariffs on China. Even though the U.S. and China avoided those triple-digit tariffs, lower-level U.S. tariffs may still be weighing on China. Economists say China's underemployment is worsening due to higher levies and industrial overcapacity. Those factors are squeezing workers' paychecks, shaking their confidence about the future, and leading them to spend less. Consumer confidence in China remains near record lows, and retail sales are slowing down. To discuss U.S.-China trade relations, NTD's Kerry Dunst was joined by journalist and political analyst Brian Reisinger. I want you to comment on the way that Trump is approaching these negotiations. It seems somewhat unusual for a president to get down into the very specifics of the deals, as opposed to just set the climate for the trade to go back and forth, and what the high-level bumpers might be. Particularly, getting involved with soybean exports to China. What are your thoughts on that? Well, making sure that China is being fair in its trade with us, and that China is buying a robust amount of agricultural products, is a good thing. One of the issues that we have with China is, in addition to manipulating their currency and cheating on trade, they have bought large amounts of American agricultural products, and then they will suddenly dump those products, and that depresses the price. They actually have the ability to depress the price when they're doing that kind of hijinx. And so, having a hard negotiation with China, where they agree to purchase more soybeans, and to have that buying be steady, and above board, and reliable, that is a valuable thing. I think the other thing that would be valuable as well, however, is to diversify beyond China. So, those dozens of countries that I talked about that we could have trade deals with, let's make sure they're fair, but we can have more trade deals with them. The more we do that, the more we're able to move away from depending so much on China, because it's such a large part of the world economy, that it has the ability to impact our American farmers and others kind of at its whim. And so, if we can diversify further and get more countries to agree to good, tough trade deals with America, that is a situation where we'll be able to move away from China really holding American farmers and others hostage. Yeah, the term frenemy or competitor, however you want to understand the very complex relationship that we do have with China. President Trump yesterday negotiated, I guess, down from 20% to a 15% export fee on NVIDIA and AMD chips that will be sold to China. These are not the same latest model AI chips that are allowed for U.S. applications. Some concerns, obviously, though, that this could empower their military. How do you find this unique deal? It's somewhat, I wouldn't say unheard of, but very unusual to sort of, it's almost like an export tariff. Yeah. Yeah. You know, I think that with chips and other technologies, it's really important to listen to our military and make sure that they don't feel that we're trading something away that puts us at a disadvantage. So, as long as our military leaders feel that, you know, the chip technology that we're maintaining, that is superior to what we're trading with China, those kinds of things are really, really important. The other thing that that brings to mind for me is it just shows you how interconnected all these trade issues are. And the more that we are negotiating with each country on individual crops and products, the better off we are. It allows us to drive, say, a hard bargain around soybeans, and maybe things are or aren't working out around chips or any other type of product. But we know that the deal around soybeans or around corn or around tomatoes, whatever the issue may be, is a fair one. It's really important to be able to be nimble and to be able to negotiate these things in as individual ways as possible, because the great big trade deals that involve dozens of types of products across many countries, they always have trade-offs in them. It's good for one type of grower or producer in one part of the economy and bad for another. So, trying to negotiate around individual items is a good thing. President Trump clearly taking the reins on this lever in his negotiations with China. It'll be interesting to see how this 90-day reprieve plays out, especially as he negotiates with Putin, where supplementary tariffs could come into play if he doesn't feel like Putin is acting in good faith. A lot to look out for. Really appreciate you joining us, Brian Resinger, journalist and political analyst. Thanks very much. More on China's trade and tech sector. A Chinese state-affiliated social media account is urging Chinese companies to avoid buying American chipmaker NVIDIA's H20 chips, alleging they contain a backdoor feature. NVIDIA denies the claims. The account claimed that this alleged backdoor could enable remote shutdown, which would allow NVIDIA to remotely access and disable the chips. It also alleged the chips have a license locking function that could render them invalid, as well as a tracking and positioning feature. The account, which had previously appeared on China's defense ministry website, advised Chinese companies not to buy NVIDIA's H20 chips, claiming they are not safe for China. An NVIDIA spokesperson has denied that its chips have backdoors. This is the third time in a month that NVIDIA refuted China's allegations about a backdoor feature. President Trump is set to meet with Russia's Vladimir Putin in Alaska this Friday. As the world watches closely, China signals interest in talks. And regime leader Xi Jinping speaks with Brazil's Lula da Silva, calling for unity to resist the U.S. Here's more. China is a key supporter of Russia's invasion of Ukraine. Foreign Ministry spokesperson Lin Jian today weighed in on the upcoming talks, saying, quote, we hope all parties concerned and stakeholders will take part in the negotiation process. Meanwhile, regime leader Xi Jinping spoke by phone with Brazilian President Lula da Silva. The two discussed the Ukraine war, with Xi emphasizing the best-ever ties between Beijing and Brazil, calling for joint efforts to achieve political resolution to the war. Xi also underscored a united front against what he called a bullying behavior, a reference to U.S. tariffs. Back in Washington, Trump addressed reporters ahead of the summit, calling his meeting with Putin a feel-out session. He made clear any peace deal between Moscow and Kyiv is not his to make. Drones. They can do a lot, making people's lives easier and cutting costs. But they can also see a lot. Critics say too much. President Trump wants American drone dominance. But why and who's the leader? Our data reporter Kevin Hogan tells us what's in store for us and what's been dubbed the drone age. Data projections reveal the drones are coming. The FAA says 822,000 drones are registered and rising. What does that mean? Saving costs and lightweight deliveries, convenience, a big boost to first responders. The drawbacks? Major national security concerns and privacy concerns. So why are drones in the spotlight? Because President Trump wants to integrate drones into society, build more, and export them. He's given drones the stamp of approval. Now, that said, the Association for Unmanned Vehicle Systems International says that over 100,000 jobs were created in the last decade for drone-related purposes. Now, drones bring a lot of opportunity in telecommunications, sports, infrastructure, movie making, agriculture, public safety, etc. And the U.S. is embracing them. But who is winning the drone race? The rest of the world, outside of one company in China, sells only about 10% of the consumer drones. But one company in China, DJI, sells 90% of them. Now, that data is according to Grandview Research in 2024. China has market gravity. The U.S. wants to pull some of that away from companies that are beholden to the Chinese Communist Party. The U.S. wants to harness drones for the forthcoming reasons while minimizing the risks. That brings us to some of the pros of drones. These versatile tools can improve daily life and assist operations for lightweight deliveries. They're much faster than ground transport. Amazon says they can ship them to your door in under an hour. That's lightning fast. And they can reportedly drive down the shipping costs, as you'll see here, especially for food and drink delivery. Here, a driver sometimes stuck in traffic, earning a wage, paying for parking, and expecting a tip. Here, no gas, no tip, no oil change, no auto insurance. It's much cheaper. And for police, drones are the eyes in the skies. Surveillance, search and rescue with thermal cameras, drug interdiction, fugitive tracking, traffic control. And according to commercial UAV news, as of last year, over 1,400 of these types of agencies were using drones for their law enforcement operations. That's up 54% over the last six years. But the drawbacks. A bill in Congress called the Countering CCP Drones Act would add the drones made by China's DJI to a banned list from which the U.S. government can't source its hardware. The concerns include data breaches, remote manipulation, and cyber attacks. So if the U.S. isn't making them, and the future has drones in it, where are they coming from? Next concern. The public law library calls for more drone surveillance laws. Drones capture a lot of footage. And sometimes that's unbeknownst to the observed. The library says there's only a patchwork of state laws not giving the protection needed for what they call the increasing ubiquity of drones. And then there's the noise, the constant buzzing. According to the University of Southampton, who's annoyed the most? City dwellers aren't really phased, but suburbanites and rural folks report a big annoyance when drones are overhead. Now, the data for the North American drone market, according to Grandview Research, it's gone up from about $14 billion in 2018 up to about $27 billion in 2024. So where is that headed? All the way up to over $61 billion by 2030. Now, the expectation is that that will more than double. Now, that number is going up. The drones are coming. But when we look at that data very closely, we actually see it's not just a linear increase. We see that that rise is actually exponential. As I said at the beginning, the drones are coming. Back to you. Coming up, NASA is planning to build a nuclear reactor on the moon. How it ties into the U.S.-China moon race. To have a base on the moon, we need energy. And an investigation revealing the Pentagon outsourcing sensitive IT services to Microsoft engineers based in China. What's at risk if that information gets leaked? People could die and billions of dollars could be lost. That and more in just a minute here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer, a NASA project straight out of science fiction with the goal of building a nuclear reactor on the moon. Plans are already in motion and the goal is to have it running within the next five years. Let's take a look. But we are in the race. We're in a race to the moon, in a race with China to the moon. And to have a base on the moon, we need energy. But again, energy is important. And if we're going to be able to sustain life on the moon to then go to Mars, this technology is critically important. Transportation Secretary and interim NASA chief Sean Duffy is expanding a plan to power a future base on the moon. The goal is to build a 100-kilowatt nuclear reactor on the lunar surface. It's an upgrade from an earlier planned reactor, but still would only generate enough electricity to power about three average-sized American homes per day. Duffy says lunar fission power is critical for building a future human presence on the moon and eventually missions to Mars. The development comes as the U.S. competes with China and Russia in space. Those two countries are working together on a similar moon reactor and could block U.S. access to more favorable areas of the moon with a keep-out zone. Chinese engineers have access to Pentagon data. A ProPublica investigation revealed the Department of Defense was outsourcing sensitive IT services to Microsoft engineers that were based in China for nearly a decade. To discuss it, NTD's Kerry Dunst was joined by Paul Steidler, senior fellow at the Lexington Institute. These are some shocking revelations. Can you summarize the findings and then the subsequent actions taken by Defense Secretary Hegseth? Sure. So as you mentioned, Kerry, this went on for a decade. Microsoft had Chinese engineers, and these are engineers who were in China, not engineers here in the United States, who were working on very important information that was just below the level of classified. And how the Pentagon defines that is information that could be expected to have a severe or catastrophic effect on operations, assets, and individuals if it is compromised. In other words, people could die and billions of dollars could be lost. That is what Microsoft had people in China working on. As a result of the ProPublica story that came out on July 15th, they very thoroughly researched in-depth piece. Senator Tom Cotton, the chair of the Senate Intelligence Committee, demanded that that practice stop. Secretary of Defense Pete Hegseth agreed with him. The bad news is this went on for 10 years. The good news is the administration and Senator Cotton brought it to a stop as soon as it was discovered. This is something that is obviously very unwise and should never have happened. But apparently, we're going to have to take some steps to make sure that things like this are not repeated again because the consequences, according to the government's own definition, are quite severe. Well, let's dig a little bit deeper into Microsoft. They've often held the crown by market capital as the largest global company. I think maybe they sit at two or three at this point. But for the last 30 years, they've been anywhere from one to top five. They've never really dropped below that. They've got a $4 trillion valuation. And the U.S. government is among its top customers. We don't know if it's number one, number five, number 10, but it's a huge customer of Microsoft. So what's Microsoft's responsibility here considering that they are a U.S.-based company? I will say this. These actions are quite disappointing from Microsoft. This is a respected company. This is a company that contributes a lot to the U.S. economy. Microsoft doesn't need to engage in tactics like this in order to make a profit. They're one of the most profitable companies in the world. And if they're going to lose out on this piece of business because it's too expensive for them to use U.S. engineers to do Department of Defense work, then so be it. In fact, that's another one of the changes that Senator Cotton is pushing for is to have Americans just work on classified and other important information. That we're never going to outsource that, whether it's the cloud computing program, which is at issue here, or something else to people who are not American citizens. It makes no sense to do that. Yeah, certainly a concerning story. Really appreciate you breaking it down for us. Paul Steidler, Senior Fellow with the Lexington Institute. Thank you. Okay, thank you. Bye-bye. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at chinainfocusandntd.com. We'd love to hear from you. Around the clock original news coverage. Visit us at ntd.com or download our NTD app. Thanks for watching. See you tomorrow.