The world's two largest economies have bought more time, but not a settlement. Chinese President Xi Jinping's visit to Washington from 23 to 25 September (CommonWealth Magazine) produced a short truce extension, a modest tariff-relief list and continued AI talks. Disputes over rare earths, chips and the wider tariff wall were left for later.

A two-month extension, confirmed by both sides

US Treasury Secretary Scott Bessent announced the extension on 23 September, the day Xi landed at Joint Base Andrews. "We have agreed today that we will extend what we call the Busan Agreement," he told Fox News. The truce, which was due to expire on 10 November, now runs to 10 January, he said (Al Jazeera).

Bessent also acknowledged friction. "There are some deliverables that have not been perfect on the Chinese side," he said, as reported by PTI. He said a larger package could come by January, or the sides could "just roll the current deal".

Beijing did not confirm the extension straight away, and the Shenzhen Component index fell 2.34% on 24 September amid the uncertainty (Business Standard). China's Ministry of Commerce (MOFCOM) announced on 28 September that the two sides would extend their "Kuala Lumpur economic and trade arrangement", originally due to expire on 10 November 2026, until 10 January 2027 (People's Daily Online).

What was agreed

The White House fact sheet dated 25 September lists outcomes including:

  • consensus on recommendations for "more favorable tariff treatment for $30 billion of non-sensitive goods in each direction"
  • Chinese imports of at least 10 million metric tons of US coal in 2027 and again in 2028
  • a new bilateral Board of Investment
  • a US–China "Super Intelligence" dialogue, with the next exchange due by November 2026

Reuters reported that China's list includes corn, wheat, sorghum, meat and dairy, but not soybeans. The US list covers small appliances such as coffee makers and toasters, as well as toys and holiday decorations (Reuters via Insurance Journal).

Where Washington and Beijing tell it differently

The published accounts diverge:

Issue US account Chinese account
Tariff list Goods "could benefit from more favorable tariff treatment in the future" (USTR) Tariffs on around 90% of listed products to be lowered to most-favoured-nation (MFN) rates (MOFCOM, via People's Daily Online)
Coal At least 10 million metric tons in 2027 and again in 2028 (White House) No volume given by MOFCOM (Reuters via Investing.com)
AI "Super intelligence" dialogue Xi's readout refers to "AI" and says it "must be kept under human control" (China's Foreign Ministry)
Taiwan Not mentioned in the fact sheet Xi urged the US to "adhere to the correct position of opposing 'Taiwan independence'" (China's Foreign Ministry)

CommonWealth Magazine reported no public indication that Washington had moved from its traditional wording that it "does not support" Taiwan independence.

What was not resolved

Tariffs. In February the US Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) exceeded presidential authority. A Section 301 forced-labour tariff of 12.5% on Chinese goods took effect on 24 July as a replacement (China Briefing). MOFCOM said the US had "explicitly committed" that the replacement tariffs would not exceed 20% (MOFCOM). Most of the earlier Section 301 tariffs from 2018 remain in effect.

A Congressional Research Service (CRS) overview put average tariff rates, as of July 2026, at about 36.5% on Chinese goods entering the US and 31% on US goods entering China. These figures exclude exemptions and sectoral actions and are not trade-weighted (CRS, via EveryCRSReport; also cited by Al Jazeera).

Rare earths. Under the 2025 deal, China agreed to suspend its expansive October 2025 rare-earth export controls (White House, November 2025). Neither the new White House fact sheet nor MOFCOM's announcement, as reported, explicitly says that suspension now runs to 10 January 2027, although Al Jazeera reported that the extension delayed the curbs until then. The White House says only that the two sides "continue to work on U.S. concerns regarding supply chain shortages related to rare earths and other critical minerals". China's April 2025 licensing controls on seven medium and heavy rare earths were never suspended (Mining Technology; Reuters via Yahoo Finance). The International Energy Agency estimates that China refines about 84% of the rare earths used in permanent magnets, down from more than 90% earlier (Bank of Finland BOFIT).

Chips. Neither government's readout directly mentioned chip export controls. US Trade Representative Jamieson Greer told CNBC that national-security export controls were "off the table" in the trade talks, the SCMP reported via The Korea Times. "The biggest thing that's changed is China's growing confidence in its chip self-reliance efforts," said Kyle Chan, a fellow at the Brookings Institution. The US suspension of the "Affiliates Rule" is expected to follow the truce to January, though no Federal Register notice had appeared by 1 October (Miller Canfield).

"The two-month extension isn't a bridge to a grand bargain – it's a temporary sandbag holding back a structural flood," Beijing-based analyst Einar Tangen told Al Jazeera.

What it means for Asia

Southeast Asian exporters. USTR says the US-side list covers "household goods, toys, and other products that the United States generally does not import from other countries", which, if accurate, would limit overlap with Southeast Asian suppliers. Under the separate Section 301 action, USTR set a 10% rate for Indonesia and Malaysia, against 12.5% for China. For more on supply-chain shifts, see our analysis of ASEAN versus China in foreign investment.

Indonesia. China took US$40.62 billion, or 25.39%, of Indonesia's non-oil and gas exports in January–July 2026. The US took US$19.19 billion, according to BPS data reported by IDNFinancials. In the first half, iron, steel and nickel were key shipments to China; electrical machinery, footwear and apparel dominated those to the US (RRI). See also our report on Indonesia and the US–China tech rivalry.

Singapore. In August, the Ministry of Trade and Industry (renamed the Ministry of Energy, Trade and Industry on 1 October) raised its 2026 growth forecast to 4.5–5.5% on stronger AI-related spending, while warning that "the US tariffs are expected to continue to weigh on the exports of affected economies" (Bernama).

Australia. On 8 October, ground was broken on Arafura Rare Earths' Nolans project in the Northern Territory. The mine was among the projects cited in the Australia–US critical minerals deal, and Resources Minister Madeleine King put federal support at about A$1.2 billion (ABC News).

Markets. China's CSI300 index slid more than 2% to a one-year low on 28 September, with few concrete summit details to cheer (Reuters via Insurance Journal).

What happens next

  • By end-November: the next round of the AI dialogue (People's Daily Online).
  • 18–19 November: APEC leaders meet in Shenzhen (gov.cn/Xinhua). Trump said on 25 September that he would meet Xi again in November in China and at the G20 summit in Miami in December (Bernama).
  • 1 January 2027: a US defence-procurement ban on rare-earth magnets mined, refined or produced in China and other covered countries takes effect (DFARS 252.225-7052).
  • 10 January 2027: the extended truce expires. The two sides must either reach a larger deal or roll it over again.

Key numbers

  • 10 January 2027: new truce expiry (previously 10 November 2026)
  • US$30 billion: goods recommended for tariff relief in each direction
  • 12.5%: US Section 301 "replacement" tariff on Chinese goods
  • 36.5% / 31%: approximate average US tariffs on Chinese goods and Chinese tariffs on US goods (CRS, as of July 2026)
  • 10 million metric tons: US coal China is to import in 2027 and again in 2028 (White House)
  • 84%: China's share of refining of rare earths used in permanent magnets (IEA estimate)
  • 25.39%: China's share of Indonesia's non-oil and gas exports, January–July 2026

This article was researched with AI assistance and reviewed by the NDNews editorial team. It is based on official data and media reports as of 14 October 2026.