The Week Ahead in International Trade: US-China deadline, Trump meets Putin and chip export licences deal

The global economy is holding its breath this week, as an extension to the US-China trade truce hangs in the balance.

There could also be significant movement in the Russia-Ukraine conflict, with everything that entails for sanctions regimes, as US president Donald Trump and Russian counterpart Vladimir Putin meet in Alaska.

US-China truce deadline

It’s a critical week for the US-China trade relationship, as the end of a 90-day tariff truce approaches.

If a deal to extend current duty rates is not agreed before tomorrow (12 August), tariffs could rocket upwards for a second time this year. Currently, US tariffs on Chinese goods include a 10% baseline tariff, a 20% tariff based on China’s alleged role in fentanyl trafficking to the US and a range of other sector-specific duties.

The total rate sat at 145% at the height of the trade war between the two countries in April.

As exporters in both countries await the final outcome of recent talks, Trump has been writing on his Truth Social platform that he hopes China will offer to boost its imports of US agricultural products, particularly soybeans. This, he suggested, would be “a way of substantially reducing” China’s trade surplus with the US.

Export licence deal

This week’s crunch moment for the US-China relationship comes as major semiconductor manufacturers agree a deal with the US government on export licences to the Asian nation.

The BBC reported earlier this morning that Nvidia and AMD have struck an “unprecedented” agreement with the US administration to pay it 15% of its revenue from sales in China in return for export licences.

Nvidia’s advanced H20 chip, which has applications in AI, has been a source of concern for national security experts, a number of whom issued a letter to the government in July over fears that it is a “potent accelerator of China’s frontier AI capabilities”. The decision to ban exports of the chip to China earlier this year “was the right one”, it argued.

Now, however, it appears that Nvidia will be granted permission to export the chip as long as it shares the revenues with government. AMD, meanwhile, appears to be in a similar position with its MI308 chip.

While AMD did not respond to a request for comment, Nvidia said that, “while we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide”.

Russia relief?

This week’s meeting between Trump and Putin marks the first visit by the Russian president to the US in ten years.

The trip comes in very different circumstances – last time, Putin met with then-US president Barack Obama. This week, he meets Trump to discuss a grinding three-year war in Ukraine.

The consequences for trade could be many. US sanctions on Putin will need to be lifted for him to attend the meeting, which is taking place in Alaska. This means that the US might not be imposing additional sanctions on Russia, for now, but also that existing restrictions could be up for reconsideration as part of the talks.

The FT reports that European nations are urging Trump to use the stick as well as the carrot with the Russian president, pushing for additional sanctions as part of a strategy to secure a better peace deal for Ukraine.

Chartered Institute events to look out for

The latest Customs Corner Live Q&A session takes place this week as part of our Lunchtime Learning series of webinars.

The Thursday 12pm webinar will offer answers to some of your burning customs queries, as well as a host of insights from Chartered Institute Customs Practice director Anna Doherty.

Members of the Chartered Institute can sign up for that one here.