US and China Extend Trade Truce to January 10, Bessent Says

The US and China have agreed to push their trade truce back by two months, giving markets a short-term reprieve from the November tariff cliff. Treasury Secretary Scott Bessent announced the extension after an unscheduled meeting with Chinese Vice Premier He Lifeng in Washington.

What was announced

Bessent said the so-called ‘Busan Agreement’ — the economic détente between the two countries that was scheduled to end on Nov. 10 — will now be extended until Jan. 10. Xi and Trump agreed to the original one-year trade truce at a meeting in South Korea last October.

The extension is designed to keep tariffs lower for longer and rare earths flowing between the two economies.

Why it matters for markets

The extension removes a looming source of uncertainty ahead of Thursday’s meeting between Trump and Xi and gives negotiators more time to work toward a broader trade agreement. That takes a near-term tariff shock off the table for importers, retailers, and semiconductor supply chains.

Asked whether a broader agreement can be reached by the new date, Bessent said he does not know whether a bigger deal can be done or whether they will just roll the current deal. Traders should treat January 10 as the new event risk on the calendar.

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Sticking points remain

Bessent said the extension would give both sides time to determine if China is fulfilling its commitments, noting that some Chinese promises, especially those related to rare-earth exports, haven’t been fully met.

Jens Eskelund, president of the European Chamber of Commerce in China, pointed out that simply extending the trade truce does not address challenges companies face, including the lack of a standardized approach to apply for rare earths export licenses.

The Xi state visit backdrop

Bessent spoke on Fox News as Chinese President Xi Jinping landed in Washington, D.C. for a state visit through Friday. Xi’s visit marks his first state visit to the U.S. in more than a decade as the two countries navigate disputes over trade, technology and national security.

In earlier discussions, the US and China had already agreed to start an artificial intelligence dialogue and set up a bilateral trade body.

Options market and stocks to watch

Watch for tariff-sensitive and China-exposed names to react to the extension:

AAPL — heavy China manufacturing exposure; watch for reaction in supply-chain risk premium.

TSLA — Shanghai production and China sales make it a direct read-through on US-China tone.

NVDA — any softening on chip export policy or AI dialogue progress could move flow here.

MP — rare earth names remain sensitive as licensing bottlenecks stay unresolved.

BABA — China ADRs typically catch a bid on de-escalation headlines.

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