Bessent Says US and China Will Stretch Trade Truce to January as Xi Visits for AI Talks

The US-China trade truce is getting two more months, not the long runway markets wanted. Treasury Secretary Scott Bessent told Fox News the deal will be extended to January 10, just as President Xi Jinping arrived in Washington for a state visit running through Friday.

The truce was struck in Busan, South Korea, last October and was due to expire in November. Extending it keeps tariffs lower for longer and keeps rare earths flowing to American manufacturers, CNBC reports.

What Washington is offering is an extension of the existing arrangement, not a new trade pact. Chinese state media did not immediately confirm Bessent's comments, and no joint communique has been published.

The short window is the story. Markets had widely expected six months or longer. Scott Kennedy of CSIS reads the January date as a sign of US dissatisfaction, a way to keep pressure on Beijing, which Bessent said still needs to fulfill more deliverables.

Kennedy sees a side benefit too. A deadline in January makes it more likely Xi turns up at the G20 in Miami, a summit where China's non-market trade practices are already a flashpoint.

AI is on the table alongside tariffs. Bessent met Chinese Vice Premier He Lifeng in New York before the visit, and the two discussed setting up an alert system for AI incidents, a rare piece of cooperation between rivals racing on the same technology.

Beijing's own tone was softer. Xi's arrival readout stressed that the two countries should be partners, not rivals, and should manage competition. It did not mention tariffs, rare earths or AI.

For companies, the extension fixes less than it seems. The European Chamber of Commerce in China noted that stretching the truce does nothing about the slow, inconsistent rare-earth export licensing that still snarls supply chains.