Xi Jinping arrived at Joint Base Andrews on Wednesday for his first state visit to Washington in 11 years, with the Busan tariff truce expiring Nov. 10 and U.S. Trade Representative Jamieson Greer having said an extension of three to six months would be acceptable.
"The truce extension is going to be the key test of this meeting, and the length of it matters enormously," Anna Ashton, co-founder of Ashton Intelligence, said. "China still holds real leverage through its rare-earth export restrictions, and that shapes how far Washington is willing to go."
Beijing wants the truce extended through the end of Trump's term, according to the Council on Foreign Relations, while the administration has told the Financial Times that only two-thirds of China's rare-earth commitments have been fulfilled and that a shorter extension "serves as a compliance period for assessment." The gap between those two positions is the summit's central negotiation. Washington has kept its escalation tools unused: a Section 301 excess-capacity finding recommending a 7.5 percent tariff on Chinese goods, launched in March across 16 countries, remains unsigned, and the Sanctioning Russia and Iran Act that Trump signed Sept. 18 authorizes tariffs of up to 100 percent on the largest buyers of Russian oil and gas, China among them.
The asymmetry in the relationship is visible in the pageantry. Trump met Xi on the tarmac, a B-2 Spirit and four F-22 Raptors overflew the arrival ceremony, and Melania Trump hosted Peng Liyuan separately — none of which happened when Trump visited Beijing in May. Beijing reads that as confirmation it has tamed the administration with rare-earth controls, a view the administration at times appears to share. It declined to use retaliatory tools available in 2025, from sanctions on smaller Chinese banks to export controls on other chokepoints, and instead cut tariffs in response to Beijing, producing the October Busan deal.
Rare earths are the variable that sets the clock
The compliance dispute is the mechanism that determines the extension's length. If the administration judges Beijing's rare-earth throttling to be "a glitch in the system," a longer extension follows; if it judges it "an intentional haircut," the reserved tariff levers come back into play. That distinction is now the single most important input for anyone positioned in critical-minerals, defense, EV and semiconductor supply chains, all of which have traded on rare-earth headlines since the Busan agreement.
Beijing has escalated on other fronts even as it seeks de-escalation on tariffs. New State Council directives effectively criminalize corporate decisions to move production out of China, rare-earth supplies have been throttled despite the Busan deal, U.S. citizens have been detained, and Chinese entities reportedly supplied satellite imagery used in a strike that caused American fatalities. Washington's response has been restrained by comparison: de facto bans on Chinese drones and robots, an advisory accusing six Chinese firms of industrial-scale distillation of American AI models, and the unused Russia-Iran tariff authority.
The last time Washington held tariff authority in reserve this way was the 2018-2019 escalation cycle, when each delayed tranche eventually landed and the S&P 500 fell 6.8 percent in the four weeks after the May 2019 increase before the Phase One framework reversed the slide. The difference now is that Beijing has a chokepoint Washington has not neutralized.
Deliverables are thin, and the Board of Trade is the test
Neither side expects major breakthroughs. The likeliest outcomes are a temporary extension, Chinese agricultural and energy purchases, and a formal AI dialogue. The Board of Trade announced in May is the most probable vehicle for purchase commitments, with Greer saying the two sides are drafting initial product lists covering consumer and low-tech goods from China and energy, farm goods and medical devices from the United States. Reports suggest tariff cuts on $30 billion in two-way trade, though analysts expect any announcement to fall short of that figure.
The purchase ledger is already behind. The White House said in May that China agreed to buy at least $17 billion annually in American agricultural products on top of a pledge for 25 million metric tons of soybeans a year, which would bring total annual farm purchases to about $30 billion, according to Luke Lindberg, the U.S. undersecretary of agriculture for trade. The USDA forecast last month that China would import $21.5 billion of American farm goods in the 12 months starting Oct. 1 — roughly $8.5 billion below the pledged level. China also promised 200 Boeing aircraft in May; four months later, none have been ordered. Boeing CEO Kelly Ortberg said last week that Chinese airlines would announce on their own schedule and that "we're progressing nicely."
Trump faces midterm elections in under six weeks and wants to demonstrate that the approach is working. Xi returns home to begin a year-long run-up to next fall's Party Congress, where he is expected to secure another five-year term, and has leader meetings scheduled in Shenzhen in November and Miami in December to manage Washington through that window. Both sides want favorable optics, which argues for an extension long enough to claim a win and short enough to preserve leverage.
By Friday, the market will know whether the truce runs for months or years. A three-to-six-month extension keeps the Nov. 10 cliff in play and leaves the Section 301 finding and the Russia-Iran tariff authority live into 2027, which is the outcome that reopens escalation risk for equities and supply-chain-exposed sectors. An extension through the end of Trump's term removes that tail for now but concedes that rare-earth leverage worked.
This article is for informational purposes only and does not constitute investment advice.
