China’s factory activity unexpectedly deteriorated in July to a three-month low despite a tariff truce with the US, as early signs emerge exports are slowing and weak domestic demand persists.

Factory activity fell to a six-month low in July as signs emerged that China’s exports are slowing despite a ‘tariff truce’ with the US.

China’s top leaders have pledged to help companies slammed by higher U.S. tariffs but held back on major moves after trade talks.

The United States and China have agreed to work on extending a deadline for new tariffs on each other after two days of trade talks in Stockholm concluded on Tuesday, according to Beijing’s lead negotiator.

Chinese and American trade negotiators concluded their two-day meeting in Stockholm without a clear path forward to avert tariffs from skyrocketing back to ultra-high levels that formed an effective blockade on trade between the world’s two largest economies.

"We're moving along with China. We're doing fine with China," Trump told reporters at the White House. "I think it's going to work out very well. We're right in step. I think we're going to have a very fair deal with China."

President Donald Trump’s tariff threats against Thailand and Cambodia pushed them toward ending their deadly border clash this week, showing again his willingness to use a trade war cudgel to stop armed conflict and upstaging China in its own backyard.

After a “constructive” round of talks ahead of an Aug. 12 deadline, Treasury Secretary Scott Bessent said, “Nothing is agreed until we speak with President Trump.”