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U.S.-China trade truce extended for two months, Bessent says, as Xi begins state visit
CNBC reports U.S. Treasury Secretary Scott Bessent saying the U.S.-China trade truce—aimed at keeping tariffs lower and maintaining rare-earths flows—has been extended until January 10 as Xi’s state visit begins.
CNBC reports that U.S. Treasury Secretary Scott Bessent told Fox News that the U.S.-China trade truce has been extended until January 10. Bessent said the aim is to keep tariffs lower for longer and support the flow of rare earths, while adding that Beijing still needs to fulfil additional deliverables.
The report places this alongside the start of Chinese President Xi Jinping’s state visit to Washington, D.C., with Xi’s programme running through Friday. CNBC notes the truce was previously agreed as a one-year arrangement in October in South Korea and was due to expire in November, so the extension is a short, stop-start continuation rather than a full reset.
From an FX perspective, what matters is not the diplomatic event itself but what it implies for the policy path for trade costs and supply availability. The longer tariffs are kept lower, the more it can reduce tail risks to import costs and global industrial input pricing, which can feed into inflation expectations and therefore interest-rate expectations.
Traders should watch whether the “deliverables” condition is specified further in subsequent talks and whether the truce terms evolve beyond January 10, since that determines how durable the near-term stability in trade policy is.
Why this matters for FX
An extension to a tariff-related trade truce can affect FX through the trade and inflation channels: keeping tariffs lower for longer tends to reduce (or at least postpone) downside risks to import-intensive supply chains and helps stabilise pricing expectations, which in turn can influence rate expectations and risk sentiment. It also speaks to near-term policy de-escalation between the two largest trading economies, shaping global growth assumptions that matter for USD risk sentiment and for currencies exposed to trade volumes and industrial supply chains.