US, China Extend Trade Truce as Trump Welcomes Xi for High-Stakes Summit

The United States and China have agreed to extend their existing trade truce by two months, giving Washington and Beijing additional time to negotiate a broader economic agreement as Chinese President Xi Jinping begins a three-day state visit to the US.

US Treasury Secretary Scott Bessent announced the extension on Wednesday after meeting Chinese Vice Premier He Lifeng. The current arrangement, which was due to expire on November 10, will now remain in place until January 10, 2027.

The extension came just as Xi arrived in the United States for talks with President Donald Trump. The Chinese leader was personally welcomed by Trump at Joint Base Andrews near Washington, in a highly ceremonial reception that included an honour guard and military flyover.

Trade Truce Extended Ahead of Trump-Xi Talks

The agreement keeps existing trade arrangements in place while the two countries continue discussions on a potentially wider economic deal. Bessent said it was uncertain whether the two sides would reach a larger agreement by the new January deadline or simply extend the current arrangement again.

The extension is intended to provide more time for negotiations over tariffs and other economic issues between the world's two largest economies. Officials have been discussing possible reductions in tariffs covering a range of products, including consumer and agricultural goods, energy products and medical devices.

Xi Receives Rare Welcome From Trump

Xi's arrival in Washington was accompanied by an unusually high-profile welcome from Trump. The US president travelled to Joint Base Andrews to greet Xi and his wife, Peng Liyuan, personally.

Trump's decision to receive Xi at the military base marked a departure from the usual protocol. According to reports, the last US president to personally welcome a foreign leader at Andrews, apart from the Pope, was John F. Kennedy in 1962.

The reception comes four months after Trump visited Beijing, where the two leaders held their first face-to-face meeting of the year.

AI, Taiwan and Other Issues on Agenda

Trade is expected to remain central to the Trump-Xi meeting, but the discussions are likely to extend beyond tariffs.

Artificial intelligence has emerged as another area of US-China negotiations. Officials from both countries have been discussing an AI dialogue that could include a communication mechanism for incidents involving national security concerns.

Taiwan is also expected to remain a sensitive issue in the broader relationship, while the ongoing conflict involving Iran could feature in discussions between the two leaders.

The two countries have made progress on some commitments reached during earlier negotiations, but several areas remain unresolved. These include proposed US-China investment mechanisms, agricultural purchases and planned aircraft orders.

Markets Watch for a Larger Agreement

The two-month extension provides businesses with additional certainty over trade policy, but it does not resolve the deeper disagreements between Washington and Beijing.

The immediate focus will now shift to the Trump-Xi summit and whether the leaders can build on the temporary trade arrangement. The extension gives both governments until January to work toward a broader agreement while keeping the existing truce in place.