The U.S. and China agreed Wednesday to extend their Busan trade truce to January 10, Treasury Secretary Scott Bessent said, hours before Chinese President Xi Jinping arrived in the U.S. for a two-day summit with President Trump. The rollover buys time on trade even as strained U.S. alliances complicate Washington's leverage over Beijing.
Xi Jinping landed at Maryland's Joint Base Andrews on Wednesday evening to a red carpet, a military flyover and a rendition of the U.S. national anthem, greeted by Trump, First Lady Melania Trump and a formation of U.S. service members. The pageantry opens two days of talks that will test whether strain between Washington and its allies has narrowed Trump's room to pressure Beijing.
Trade truce extended to January
Hours before Xi's plane touched down, Bessent told Fox News that Washington and Beijing had agreed to extend the Busan trade truce until January 10, after meeting Chinese Vice Premier He Lifeng. Bessent said on Fox News: "We have agreed today that we will extend what we call the Busan Agreement". The truce, struck by Trump and Xi in Busan, South Korea last October, had otherwise been due to expire November 10.
Under the original deal, the U.S. halved its fentanyl-related tariff on Chinese goods from 20% to 10%, taking the overall U.S. tariff burden on Chinese goods from 57% to 47%. China, in turn, suspended sweeping export controls and committed to buy at least 12 million metric tons of U.S. soybeans in the final two months of 2025. Washington says China has not fully honored its rare-earth commitments, and the dispute remains part of the negotiations.
Allies keep their distance
That trade progress comes as countries Washington once counted on to isolate Beijing pull back. In Canada, the share of people calling the U.S. a reliable partner fell from 83% in 2022 to 35% this year, according to Pew Research Center. In Germany, the share who said Washington considers other countries' interests fell from 60% in 2023 to 23%.
Rare earths give Beijing leverage of its own. China accounted for more than 70% of global rare-earth mining and more than 87% of refining and production in 2024, according to the U.S. Geological Survey. Its export curbs halted Ford's Explorer production in Chicago for a week amid magnet shortages.
Taiwan and more summits ahead
A $14 billion U.S. arms package for Taiwan has awaited Trump's approval for months, after he described it as a negotiating chip following his meeting with Xi in Beijing in May. Bessent said the leaders could meet up to four times this year, with further sessions planned in Shenzhen and Miami. The two-month extension buys time, but leaves the bigger question — whether Thursday's summit produces a broader deal or just another rollover — unresolved.
Sources: CNBC, investingLive, Investing.com
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