Xi Gets the Red Carpet; the Trade Truce Gets Two More Months

Xi Jinping arrived in Washington on Wednesday for a three-day state visit wrapped in choreographed spectacle — troops in wigs and tri-corner hats, jet flyovers, a state dinner expected to draw tech luminaries — built around talks that extended the U.S.-China trade truce by two months while the tariff, purchase and rare-earth questions stayed on the table.

The question hanging over Xi Jinping's three-day state visit to Washington was whether Thursday's talks with Donald Trump would produce a real trade deal or just more time. The answer came first from Scott Bessent on Fox News on Wednesday, and was confirmed at the White House on Thursday: more time — the Busan truce now runs to January 10, 2027, with the tariff, purchase and rare-earth fights pushed into the next round.

Shortly after Xi landed, Treasury Secretary Scott Bessent went on Fox News to say he and Chinese Vice Premier He Lifeng — whom he had just met with for a second round of preparatory talks — had agreed to extend the "Busan Agreement": the detente the two countries agreed last October, mutually lowering tariffs and removing other trade restrictions after months of tit-for-tat retaliation pushed levies to nearly 150 percent on many Chinese products, as the Wall Street Journal described it. "We have agreed today that we will extend what we call the Busan agreement, the economic detente between the two countries that was scheduled to end on Nov. 10 that is going to be extended until Jan. 10 to give us more time to see what we can do on the economic front," Bessent said on Fox News.

Thursday's talks: extension confirmed, hard questions deferred

The extension survived Thursday. After the two leaders met at the White House, Bessent said the two sides had extended the truce during the talks by two months, giving them "more time to see what we can do on the economic front." Rather than a joint press conference, the two sides were expected to issue dueling announcements, each written for its domestic audience. On Wednesday, Bessent had also teased possible announcements on financial services, agricultural purchases and tariff cuts on $30 billion in non-critical goods; Thursday's reporting established no confirmed outcome on those items.

Two months, not a deal. Rather than locking in a durable agreement, the extension pushes the central questions — tariffs, Chinese purchases, rare-earth supplies and technology restrictions — into the next round of negotiations, as Reuters put it Thursday evening. Reuters reported the two leaders could get more chances at a more permanent deal before the new January 10 deadline, with multilateral summits in Shenzhen and Miami scheduled before year's end; another meeting is seen as likely on the sidelines of the APEC summit in China in November or the G20 meetings in the US in December.

Short of expectations — and the gaps are now specified

Two months is the short end of what had been sketched as plausible: Reuters Breakingviews' Sept. 21 analysis said the two sides "could extend the trade truce for another six to twelve months." Bessent has now specified what fell short. Beijing is meeting its requirement to buy 25 million tons of soybeans under the earlier agreement, he said Wednesday, but is lagging on its pledge to buy $17 billion in other agricultural goods; U.S. officials have said rare-earth deliveries are also falling short. Bessent told Fox News that Washington was pressing China to "be a bit more fulsome" in meeting its commitments under the existing deal. A larger economic package is possible by January, he said.

The fault lines: Taiwan, technology, and the Thucydides Trap

Taiwan dominated the strategic half of the agenda. Xi pressed Trump on the issue, saying through China's Xinhua news agency that Beijing hoped Washington would "handle the Taiwan question with prudence" and oppose Taiwan independence — a tougher formulation than Washington's long-standing line that it does not "support" independence. There are no signs the administration plans to change its wording, and there was no immediate White House readout of the exchange. Xi also invoked the "Thucydides Trap," the theory that rivalry between a rising and an established power tends toward war, while calling for regular military dialogue and stronger crisis-prevention mechanisms. Trump, for his part, invoked the two countries' wartime alliance against Japan.

Going into Thursday, Reuters had sketched what the talks could yield: sector-specific tariff cuts, cooperation on drug trafficking, expanded military-to-military dialogue, Trump pressing for the release of detained Americans, and the two sides possibly agreeing to talk more on AI. Thursday's reporting established no confirmed outcomes on those items. On AI, Bessent had proposed another U.S.-China dialogue at last-minute preparatory talks in New York with He Lifeng, after an earlier intergovernmental AI dialogue proved "such a nonstarter," Reuters Breakingviews reported.

Low expectations, choreographed

The guest lists told the story of the expectations. Reuters Breakingviews' Sept. 21 analysis sketched Xi arriving with a coterie of magnates that could include BYD, Xiaomi and CATL executives, per Reuters. Two days later, the Wall Street Journal reported that after weeks of consideration, China ultimately refrained from bringing a corporate delegation — the signal was maintenance, not deals. A state dinner Thursday was expected to bring together chiefs of companies important in both markets, including Apple's Tim Cook, Nvidia's Jensen Huang and OpenAI's Sam Altman, per Reuters. Investor sentiment matched the choreography: roughly 70 percent of the hundred-odd investors in a Goldman Sachs survey earlier this month expected the visit to be "symbolic" or a "non-event," with none predicting a negative outcome, Reuters Breakingviews reported.

Heavy politics on both ends

The politics on both ends are heavy. Trump faces falling approval ratings and public discontent over the war with Iran, with tough congressional elections for Republicans in November. Xi arrives with China's trade engine surging even as household spending stays weak, the property market downturn persists, and sweeping military crackdowns have raised questions about the army's readiness. "I think when Xi Jinping sits down with Donald Trump, he very much believes the US is in hurtling decline, and that time is on China's side," said Edgard Kagan, a former White House official now at the Center for Strategic and International Studies.

The spectacle, at least, delivered. Troops in wigs and tri-corner hats marched in a Rose Garden redesigned to look like a Trump golf club; fighter jets and bombers roared overhead during ceremonies staged on Wednesday and Thursday, one flyover so loud it caused Trump to flinch; the press corps watched the two leaders tour the Marine One helicopter on a recently redesigned South Lawn fitted with a large helipad emblazoned with the presidential seal. "He loves good granite," Trump said of Xi. "Great meeting."

The open questions now are whether the January window produces a larger deal or just another roll of the current one, whether Beijing delivers the rare-earth and purchase commitments — and whether the Shenzhen and Miami summits bring the two leaders back to the table before the January 10 deadline.