The US-China summit began on Thursday with signs the current trade truce between the two nations could last for several more months, providing some near-term stability to businesses.
US Treasury Secretary Scott Bessent said the United States and China have agreed to extend the current trade truce that was due to expire in November for two more months, pushing the next deadline to January 10, 2027.
China has not confirmed the extension of the truce yet, but Chinese President Xi Jinping struck a relatively conciliatory tone at the start of the summit, saying he supported what he called a “constructive China-US relationship of strategic stability,” and supported increased flights between the two countries.
For importers, the two-month extension of the truce would provide some stability through the end of 2026, but some businesses were hoping the existing agreement would be extended for a full year.
Trade Talks Could Result in a Larger Agreement
Bessent said the extension was intended to give both nations more time to work on economic issues, but has also said Washington is open to negotiating a broader agreement with Beijing.
Following meetings with Chinese Vice Premier He Lifeng in Washington, Bessent said Chinese officials had raised the possibility of a larger deal and that the US was open to looking at it.
The longer-term outlook for US-China trade remains cloudy, however, with both governments considering additional measures that could impact the trading relationship.
The Trump administration is considering adding an additional 7.5% tariff on Chinese goods in response to concerns about industrial overcapacity, which officials say will be delayed until after the summit and possibly beyond the US midterm elections.
According to Yale University’s Budget Lab estimates, the current US tariffs on Chinese imports would constitute an effective statutory tariff rate of approximately 26.54%.
US Seeks a More Balanced Trading Relationship
President Donald Trump said Thursday that the two nations are working toward establishing what he called a “more balanced trading relationship.”
The current trade truce goes back to an agreement announced in South Korea last October, which saw the suspension of certain tariffs and commitments from China on exports of rare earth materials.
While the latest extension of the truce could provide some near-term stability for businesses, negotiations on the broader US-China economic relationship are expected to continue through 2027.