Trump and Xi Extended the Trade Truce Only to Jan. 10. What That Short Deadline Means for Your Portfolio.
- Xi Jinping made a state visit to Washington from September 23 to 25, 2026, hosted by President Donald Trump.
- The two sides extended the "Busan Agreement" trade truce, which was due to expire November 10, 2026, to January 10, 2027. China had wanted a longer extension.
- On September 20, Vice Premier He Lifeng, Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer agreed to set up a US-China AI dialogue.
- Both leaders confirmed attendance at the APEC summit in Shenzhen in November and the G20 in Miami in December.
- On Sept. 25, the S&P 500 rose 0.51% to 7,743.41 as oil fell on hopes of a US-Iran deal.
A friendly visit with a short fuse
Xi Jinping's three-day state visit to Washington had all the ceremony: a planeside welcome, a state dinner attended by Nvidia's Jensen Huang and Tesla's Elon Musk, and two pandas promised to Zoo Atlanta.
The economic headline was smaller. The two governments agreed to extend their trade truce, known as the Busan Agreement, from November 10 to January 10, 2027. That's two months.
"We have agreed today that we will extend what we call the Busan Agreement," Treasury Secretary Scott Bessent said. China had pushed for a longer extension.
What the truce actually protects
The Busan Agreement came out of a Trump-Xi meeting in South Korea in late October 2025, after months of escalating tariffs and export controls. Its core trades:
- The US lowered some tariffs on Chinese imports.
- China paused its sweeping new controls on rare-earth exports, the minerals used in electric-vehicle motors, wind turbines, smartphones and missiles.
- China resumed large purchases of US soybeans and other farm goods.
If the truce lapses without a replacement, both sides could snap back to higher tariffs and tighter controls. That's the risk markets care about.
Why only two months?
The new deadline sits neatly between two summits. Both leaders confirmed they'll attend APEC in Shenzhen in November and the G20 in Miami in December. Analysts read the short extension as a sign that a broader deal is being negotiated and needs more time.
Other outcomes from the visit:
- A new US-China AI dialogue, agreed by Vice Premier He Lifeng, Bessent and Trade Representative Jamieson Greer on September 20
- Talks on "new market access for American farmers and ranchers." Trump said US farmers "are going to be very happy."
- An invitation for 100,000 young Americans to study in China over five years
No tariff cuts, chip-export changes or rare-earth guarantees beyond the truce were announced.
Who is most exposed
Chinese stocks and ETFs. Chinese shares, especially those listed in Hong Kong and the US, tend to jump on truce news and fall on breakdowns. Broad China ETFs can swing several percent on a single headline.
US chipmakers. China is a large market for semiconductor companies. Export controls on advanced AI chips remain the biggest unresolved issue. Jensen Huang's presence at the state dinner shows how much is at stake.
Farm and agriculture stocks. Soybean exports, fertilizer and farm-equipment makers depend on Chinese purchases.
Rare-earth users. Automakers, defence contractors and electronics makers rely on Chinese rare earths. A lapse in the truce would bring back supply risk. Background: Rare Earths and China's Export Controls.
Canadian investors have indirect exposure through canola, critical minerals and the broader commodity cycle, which follows Chinese demand.
How to think about it
- Don't trade the headlines. Truce news has moved markets in both directions for more than a year. Short-term bets on diplomacy are a coin flip.
- Know your China exposure. Emerging-markets funds often hold 20% to 30% in China. Many global funds hold US companies with large Chinese sales.
- Size positions for a bad outcome. If a truce breakdown would wreck your plan, you own too much.
- Mark the dates. November (APEC), December (G20) and January 10 are the next moments of risk.
The honest uncertainty
A two-month extension can be read two ways: a bridge to a bigger deal, or a sign that neither side will commit. The warm tone of the visit suggests the first. But the gap between what China wanted and what it got shows real disagreements remain, especially on chips and Taiwan. Expect more headlines, and more volatility, before January 10.
Frequently asked questions
What is the US-China Busan Agreement?
It's the trade truce Donald Trump and Xi Jinping agreed after meeting in Busan, South Korea, in late October 2025. The US lowered some tariffs on Chinese goods, and China paused its expanded rare-earth export controls and resumed large US soybean purchases. It was originally set to expire November 10, 2026.
When does the US-China trade truce expire now?
After Xi Jinping's September 2026 state visit, the two sides extended it to January 10, 2027. That falls after the APEC summit in Shenzhen in November and the G20 summit in Miami in December, giving leaders two more chances to negotiate.
How does the trade truce affect my investments?
It lowers the risk of a sudden tariff spike or rare-earth cutoff before January. That matters most for Chinese stocks and ETFs, US companies that sell heavily to China such as chipmakers and farm-equipment makers, and industries that rely on Chinese rare earths, such as electric vehicles and defence.
Should I invest in Chinese stocks now?
Chinese stocks can move sharply on trade headlines. If you want exposure, a broad emerging-markets or China ETF spreads the risk across many companies. Keep the position small enough that a truce breakdown wouldn't derail your plan. RiskStock doesn't give personal investment advice.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Sep 26, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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