The US and China extended their trade truce until January during the Trump-Xi summit

The United States and China agreed to extend the commercial truce they had in place until January 10, a decision announced by U.S. Treasury Secretary Scott Bessent. The extension allows the administration of Donald Trump to buy time to negotiate a broader economic agreement without giving up the conditions that Washington seeks to obtain from Beijing.

Bessent confirmed the agreement on Wednesday after meeting again with Chinese Vice Premier He Lifeng, Beijing's chief economic negotiator. The meeting took place after a round of talks held over the weekend in New York and is part of efforts to resolve outstanding issues before the meeting that Trump and Xi Jinping will hold in Washington.

''We met today to see if we could achieve a larger agreement instead of a series of small agreements,'' Bessent explained, noting that both parties decided to extend the so-called Busan Agreement until January 10. The pact was initially set to expire on November 10.

The extension represents an opportunity for Washington to maintain negotiating pressure while assessing China's compliance with its commitments. Bessent warned that some of Beijing's commitments still have not been fully met and pointed out that there are outstanding issues regarding agriculture and rare earth supply. The Trump administration seeks to ensure that any eventual broader agreement is accompanied by concrete and verifiable commitments.

One of the advances noted by Bessent was the increase in Chinese purchases of U.S. agricultural products. China has made progress in its soybean acquisitions, although the Treasury Secretary stated that Beijing continues to fall short of other agricultural commitments. According to information on the negotiations, Washington is also seeking greater guarantees regarding the supply of critical minerals and rare earths, essential resources for U.S. technology and defense industries.

The Trump administration is also considering a reciprocal reduction of tariffs on products deemed non-sensitive. The proposal would allow for a reduction of tariffs applied to about $30 billion in goods on each side, although negotiations have not yet concluded and there is no definitive agreement on that package.

Washington's strategy thus mixes the pursuit of trade stability with a demand for reciprocity. Bessent left open the possibility of maintaining the current agreement after January or moving towards a broader pact, although he acknowledged that it is still not defined which of the two alternatives will be possible.

The Busan Agreement emerged from the meeting that Trump and Xi Jinping held in South Korea in 2025 and allowed for a temporary reduction in tariff escalation between the two largest economies in the world. It also included commitments related to China's exports of rare earths and critical minerals and to Beijing's purchases of U.S. products. The extension currently prevents trade differences from causing a new round of tariff increases and reprisals.

Xi's arrival in Washington elevated the importance of the negotiations. The Chinese leader arrived at Andrews Air Force Base to begin a state visit and was welcomed by Trump and First Lady Melania Trump. The meeting between the two leaders constitutes a new opportunity to address the main points of tension between Washington and Beijing.

In addition to trade, the discussions include technological competition, artificial intelligence, rare earths, and security issues. The United States and China are also working on creating a communication mechanism to warn about incidents related to artificial intelligence, including risks associated with autonomous systems and potential cyber or biological attacks.

For the Trump administration, the extension allows to keep negotiations open without abandoning its demands regarding market access, agricultural purchases, strategic minerals, and more balanced trade conditions. At the same time, it avoids an immediate break that could affect businesses and consumers in both countries.