US-China summit extends fragile trade truce but leaves major issues unresolved

The latest US-China summit extended an economic ceasefire and delivered limited trade commitments, but did not produce the larger agreement suggested by Beijing or the “tremendous strides” described by US President Donald Trump, according to Scott Kennedy of the Centre for Strategic and International Studies. Kennedy said the two sides agreed to keep the truce covering tariffs and export controls in place until January 10, 2027. The extension could offer short-term reassurance to financial markets and businesses, but he said the period was still brief and concern could return if negotiations make little progress by November or December.

The countries also agreed to reduce tariffs on US$30 billion of products on each side and encourage trade in selected non-sensitive goods. These included agricultural products, fish and seafood, medical devices and consumer goods. According to the US side, they also agreed to refer to artificial intelligence as “super intelligence” and establish a system for notifying each other about serious incidents.

Chinese President Xi Jinping stressed that artificial intelligence should remain under human control, a position later repeated in Chinese statements. The two governments also expressed a shared commitment that Iran should not acquire a nuclear weapon and that international waterways should not be subject to tolls, Kennedy said. Kennedy said Washington’s concerns about rare-earth supplies were among the factors limiting a broader deal.

Although China’s global rare-earth exports have increased, exports to the US have fallen by about 25 per cent over the past year, while shipments to Japan have dropped sharply. Washington wants supplies to return to normal levels under China’s commitments. He said the US may also have sought stronger Chinese support on Iran, potentially linking that issue to a longer extension of the economic truce.

Possible elements of a larger agreement could have included longer-term Chinese purchases of aircraft, agricultural goods, energy and other products, as well as arrangements for Chinese investment in the US. Kennedy said China’s immediate objective appeared to be preserving the current relationship without changing its broader economic or industrial strategy. The leaders may hold back some proposals for later meetings at the Asia-Pacific Economic Cooperation or Group of 20 summits, but he said the summit’s concrete results remained modest.