US and China Extend Trade Truce Until January as Trump Welcomes Xi for High-Stakes Washington Summit
SCN AUDIO : https://scn-audio-generator.editor-af6.workers.dev/audio/scn-normal-draco-2026-09-24-a54f29b0-feba-4057-b806-e5f4d2654979.mp3
By Saqib S. Qureshi — SCN News
WASHINGTON — The United States and China agreed Wednesday to extend their trade truce by two months, removing an immediate threat of renewed tariff escalation just as President Donald Trump personally welcomed Chinese President Xi Jinping to Washington for a three-day state visit expected to test whether the two powers can stabilise relations despite deep differences over trade, technology, Taiwan and Iran.
Treasury Secretary Scott Bessent said the agreement reached with Chinese Vice Premier He Lifeng would extend what Washington calls the “Busan Agreement” until January 10. The existing arrangement had been due to expire on November 10. Bessent said negotiators had explored whether the two countries could move beyond a series of smaller agreements toward a broader economic deal, but no comprehensive settlement was announced Wednesday.
The extension gives Trump and Xi breathing room ahead of their substantive talks at the White House on Thursday. It also prevents their summit from opening under the immediate threat of another tariff confrontation between the world's two largest economies, whose previous trade escalation sent duties above 100% on some goods before the two governments stepped back.
Xi arrived at Joint Base Andrews outside Washington on Wednesday evening with first lady Peng Liyuan, beginning his first U.S. state visit in more than a decade. Trump took the unusual step of personally travelling to the military base to receive the Chinese leader, greeting Xi and Peng alongside first lady Melania Trump on a long red carpet beside the Chinese presidential aircraft.
The personal airport reception underscored the ceremonial importance Trump has attached to the visit. Xi is due to receive a formal White House welcome on Thursday before the two presidents begin talks covering a far broader agenda than tariffs, including Chinese purchases of American goods, rare-earth supplies, advanced technology, artificial intelligence and military communications. Taiwan and the continuing U.S.-Iran war are also expected to feature.
The trade agreement announced ahead of Xi's arrival is an extension rather than a resolution of the economic confrontation. Washington and Beijing remain divided over market access, industrial policy, technology restrictions and China's dominance of critical mineral supply chains. Both governments have nevertheless shown an interest in preventing those disagreements from returning to the intense tariff escalation seen previously.
American officials have been pressing Beijing to improve access to rare earths and critical minerals that are essential to industries ranging from automobiles and electronics to aerospace and defence. China controls a dominant share of global rare-earth processing and magnet production, giving Beijing considerable leverage in the wider economic relationship.
Washington is also seeking greater Chinese purchases of American agricultural products and progress on commercial aircraft. China previously committed to substantial U.S. agricultural purchases and 200 Boeing aircraft, but implementation of several earlier commitments has been uneven. Those unresolved issues are expected to form part of the economic discussions surrounding Thursday's summit.
Beijing, meanwhile, wants Washington to ease or further delay restrictions limiting Chinese companies' access to advanced American technology. The Trump administration has treated high-end semiconductors and other sensitive technologies as national-security matters, meaning the most strategically important export controls are unlikely to disappear simply because the tariff truce has been extended.
Artificial intelligence has emerged as another possible area for limited cooperation. U.S. and Chinese officials have discussed creating a bilateral mechanism under which the countries could communicate about major AI incidents with national-security implications. Such an arrangement would coexist with intense competition between American and Chinese companies for technological leadership.
Taiwan presents a much harder political challenge. Beijing claims the democratically governed island as Chinese territory and strongly opposes U.S. arms sales to Taipei. Washington maintains unofficial relations with Taiwan and remains its most important arms supplier. Xi has previously pressed Trump on the issue, and U.S. allies in Asia will be watching Thursday's meeting closely for any indication of a change in Washington's approach.
The Iran war adds another significant dimension to the talks. China maintains close economic ties with Tehran and remains the largest buyer of Iranian oil, while Washington has sought to increase international pressure on Iran. U.S. officials have indicated that China's financial and commercial relationship with Tehran will be discussed during the summit, although Beijing has shown little public indication that it intends to fundamentally alter its relationship with Iran.
The contrast between the diplomatic ceremony and the unresolved strategic disputes will define Xi's visit. Trump is offering the Chinese leader an unusually elaborate welcome while the two governments continue competing across trade, technology, military influence and global diplomacy.
Thursday's programme is expected to reinforce that contrast, with Xi receiving full state honours before entering negotiations with Trump. The summit will therefore test whether the personal relationship both presidents frequently emphasise can translate into concrete agreements beyond the temporary extension announced Wednesday.
For markets and businesses, the immediate result is significant even without a comprehensive trade deal. Extending the truce until January 10 provides another period of predictability and postpones the risk of renewed tariff escalation while negotiators work on unresolved economic issues.
But the extension also shifts the deadline rather than eliminating it. Unless Washington and Beijing reach another agreement before January, the same questions surrounding tariffs and other trade restrictions could return. Bessent's comments indicate that officials are trying to determine whether a broader arrangement can replace repeated short-term extensions.
The timing of Wednesday's announcement gives Trump and Xi a more stable foundation for their face-to-face meeting. Instead of spending Thursday attempting to prevent the existing truce from expiring, the leaders can turn to whether they can expand it into agreements covering agriculture, non-sensitive trade, rare earths, technology and other outstanding disputes.
Xi arrives with China's export sector remaining resilient despite years of U.S. trade pressure. China's global trade surplus is on course to exceed $1 trillion for a second consecutive year, while more than half of roughly 6,500 categories of Chinese products exported to the United States have increased compared with 2025.
Those numbers complicate Washington's effort to use tariffs to rebalance the commercial relationship. China also faces its own economic difficulties, including weak domestic demand and a prolonged property downturn, giving both governments incentives to avoid another disruptive trade confrontation even while their strategic competition continues.
The summit therefore begins with one concrete outcome already secured: the United States and China have pushed their trade deadline from November 10 to January 10. What remains uncertain is whether Trump and Xi can use that additional time to negotiate something more durable.
Their meeting on Thursday will show whether the truce extension is merely another temporary pause or the foundation for a broader economic understanding. Trade will remain central, but Taiwan, technology, rare earths, artificial intelligence and Iran ensure that the relationship confronting Trump and Xi extends far beyond tariffs.