Tariffs, truces and tensions: Linda Yueh on the US–China trade standoff

The United States and China have extended their fragile trade truce by another 90 days - but uncertainty still clouds the horizon, according to London Business School's Adjunct Professor Dr Linda Yueh.

Speaking on CNN, Yueh noted that President Trump’s approach to trade policy remains “both transactional and relational.” That can mean cutting deals in exchange for concessions, but also backing off if personal relationships are at stake - as when Japan’s Shinzo Abe persuaded him to drop tariffs after a golf game.

The latest sticking point? China’s purchases of Russian and Iranian oil. Trump has already hit India with punitive 25% tariffs over similar trade, and Yueh warned that “very high double-digit” duties could be on the table for Beijing. Such moves, she said, make negotiations unpredictable.

Despite talk of “decoupling,” the two economies remain deeply intertwined - and the markets know it. Fears of a “massive trade war” have eased, with Asian and European markets edging up on news of the extension. Tariffs, however, are now part of the landscape, generating about $30 billion a month in US revenue and potentially hitting $50 billion.

Yueh cautioned that tariffs are a “blunt instrument” that fuel inflation. With US consumer prices expected to rise around 3% - well above the 2% target - small businesses importing from China face steeper costs, passing them on to consumers. Proposed rebate checks from tariff revenue may soften the blow, but won’t fix the underlying pressure.

“We’re going to see tariffs for quite a long time,” Yueh concluded, “and once inflation sets in, it’s very hard to get rid of.”

Watch the full interview here