Xi Jinping meets Donald Trump at the White House on Thursday to keep a US-China trade truce on track before it expires in November. The truce has held since October 2025, cutting US tariffs on Chinese goods to 30% from a 145% peak, but a July 2026 forced-labour tariff and the Supreme Court's February ruling have left the tariff stack fragmented.
A truce that pulled US tariffs on Chinese goods down to 30% from a 145% peak now rests on a single White House meeting, with Xi Jinping and Donald Trump sitting down Thursday and both governments already damping expectations of a breakthrough.
"The two governments have converged on a managed rivalry, not a settlement," said Elena Fischer, trade policy analyst at Edgen. "What is being negotiated now is the length of the leash, not whether there is one."
The truce has held since the two leaders met in South Korea in October 2025, when Trump agreed to trim tariffs in exchange for Beijing cracking down on fentanyl precursors, resuming soybean purchases and pausing rare-earth export controls. That deal followed a 90-day pause agreed in Geneva in May 2025, which was extended a further 90 days in August. The escalation it interrupted was steep: US tariffs on Chinese goods climbed to 84% and then 125% in April 2025 after Trump's "Liberation Day" round, with China matching each step and curbing rare-earth exports.
The floor under tariff risk has not returned to pre-2025 levels. In February 2026 the US Supreme Court struck down Trump's emergency tariffs, including the China fentanyl duties and the reciprocal regime, and the administration replaced them with a temporary 10% global duty under a different statute. In July 2026 Washington added a fresh 12.5% tariff on goods from 60 trading partners, China among them, over allegations those countries failed to curb imports made with forced labour. The two sides also agreed at a May 2026 summit in Beijing to create Boards of Trade and Investment, alongside Chinese purchases of Boeing jets and US farm products — a structure that has yet to be tested by a deadline.
The truce's expiry is the binding constraint. An extension would keep the effective US tariff on most Chinese goods near 30%, a level exporters have already absorbed through margin compression and currency adjustment. A lapse would return the two economies to the 2025 regime, when the 125% peak tariff round cut bilateral goods trade sharply and pushed Beijing to restrict rare-earth shipments — a lever that reaches directly into US defense, semiconductor and clean-energy supply chains.
That asymmetry explains why the summit agenda is narrow. Analysts and investors are watching for language on extension rather than any new architecture, because a replacement framework would require congressional and regulatory work that cannot be completed before November. The Boards of Trade and Investment announced in May remain the only institutional scaffolding on offer.
The market read is correspondingly binary. A confirmed extension would remove a tariff risk premium that has sat over semiconductors, autos, industrials and agriculture since early 2025, with the clearest beneficiaries being exporters with direct China revenue exposure. An inconclusive summit, or a short-dated rollover that merely pushes the decision into 2027, would leave that premium in place and revive the safe-haven bid in gold and Treasuries that has accompanied every escalation round since April 2025.
The last time the two sides faced a comparable cliff was the October 2025 expiry of the Geneva pause. That deadline was met with a truce struck in South Korea, and risk assets rallied into year-end. The difference now is that the Supreme Court ruling and the July forced-labour tariffs have left the tariff stack more fragmented, so an extension would preserve the status quo rather than restore a known baseline.
Thursday's outcome will be read less as a trade deal than as a signal about how much of the 2025 escalation ladder both governments are willing to leave standing. The next hard date is November.
This article is for informational purposes only and does not constitute investment advice.
