USA and China agree to extend trade truce to 10 January 2027

The US and China have agreed to extend their bilateral trade truce by two months to 10 January 2027, giving both sides more time to pursue a broader economic agreement ahead of a summit between US President Donald Trump and Chinese President Xi Jinping.

“We have agreed today that we will extend what we call the Busan Agreement, the economic detente between the two countries that was scheduled to end on 10 November,” US treasury secretary Scott Bessent said in an interview on Fox News on 23 September.

“That is going to be extended until 10 January to give us more time to see what we can do on the economic front,” he said.

The initial agreement between the world’s two biggest economies was forged in October 2025 on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit in Busan, South Korea. The Busan agreement effectively paused any further tariff hikes and retaliatory trade measures between the US and China for one year.

Under the same agreement, the US reduced its overall tariff on Chinese imports to 47% from roughly 57%, while China agreed to restore rare-earth supplies and suspend additional export restrictions on critical minerals to the US. Beijing also committed to increasing purchases of US agricultural products, including a requirement to buy 25 million tonnes of US soybeans.

Bessent said discussions with Chinese vice premier He Lifeng on 23 September focused on whether the two countries could negotiate a broader arrangement rather than continue pursuing a series of smaller agreements.

“We met today to see if we could do a bigger deal as opposed to just a series of smaller things,” he said.

According to Bessent, Chinese officials raised the prospect of a more expansive US-China trade deal during talks earlier this week, although he gave no indication of its potential scope.

Asked whether such a deal could be reached by 10 January, Bessent said the outcome remained uncertain, adding that Washington was open to either extending the current arrangement or pursuing a larger agreement.

“Given that this could be a historic year where the leaders meet up to four times… we are open to the idea of just continuing the Busan arrangement or examining the bigger deal,” Bessent said.

“We are fine with both, and we are going to do what is best for the American people.”

Washington is also pressing Beijing to make further progress on commitments under the existing deal.

Bessent said China was meeting its pledge to purchase 25 million tonnes of US soybeans but was falling short of a commitment to buy $17 billion worth of other US agricultural products. US officials have also cited delays in Chinese deliveries of rare-earth materials covered under previous agreements.

In a post on social media platform X after the meeting, Bessent said discussions with He were focused on “securing meaningful commitments that protect American workers, farmers, and businesses while advancing US economic and national security interests”.

He added that the Trump administration was seeking “strategic stability” in the relationship based on “reciprocity and fairness”.

Xi arrived in the US on the evening of 23 September, with Chinese state media reporting that he was confident the meeting with Trump would produce “fruitful results”.

The Trump-Xi summit is expected to cover trade, tariffs, financial services, agricultural purchases, artificial intelligence cooperation and broader strategic issues in the bilateral relationship.

Source: BBCB