Xi-Trump Meeting: Four Takeaways from the Washington Visit for Businesses

The Xi-Trump meeting in Washington, DC, has led to tangible results for businesses, including an extension of the trade truce and the planned expansion of tariff reductions on a range of goods. However, with a concrete trade deal or lasting truce still unrealised, the next few months will be pivotal to the trade and economic relations between the two countries.

On Friday, 25 September, President Xi Jinping departed from Washington, DC, concluding the first official state visit by a Chinese president to the US in over a decade. The much-anticipated visit has been touted as constructive by both sides and has resulted in tangible outcomes for businesses, including an all-important extension to the tariff truce negotiated in October 2025, as well as planned tariff reductions on US$60 billion of two-way goods.

However, a definitive trade deal that would see a permanent reduction in two-way tariffs or longer-term extension of the trade truce remains unrealised, with both sides indicating that the next couple of months will be key in determining the outcome.

For businesses, the latest developments provide much-needed assurance and a positive sign of progress in US-China relations, but long-term stability will rest on how the picture unfolds before the extended deadline is due.

Trade truce extension offers two more months of tariff relief

China and the US have agreed to extend the truce reached following Trump and Xi’s meeting in Busan in October 2025 for two months, pushing the deadline back to 10 January 2027.

The Busan agreement saw the US agree to lower the combined tariffs imposed on Chinese goods in Trump’s second term to 20 percent, while China eliminated corresponding retaliatory tariffs. A range of other trade barriers, including sweeping rare earth export controls that China imposed in October 2025, were also suspended for one year.

China’s Ministry of Commerce (MOFCOM) on 28 September confirmed the extension, which had previously only been informally announced by US officials.

MOFCOM stated that the extension “provides space for both sides to review and assess the implementation of the joint arrangement” while fostering “a relatively stable and predictable policy environment for business cooperation between the two countries”.

What does this mean for businesses?

While the two-month extension may be shorter than many had hoped, it nonetheless provides welcome stability and predictability for businesses by avoiding the return of high tariffs, port fees, and export controls on 10 November.

As the extension is so short, the real question for businesses will be whether the two countries can reach a more substantial agreement in this relatively short timeframe. The optimistic view is that such a deal is already well underway, and that the additional two months are simply needed to resolve outstanding issues and hammer out final details.

Statements by US officials suggest this is the case. In the Fox News interview on 23 September in which the extension was first announced, US Treasury Secretary Scott Bessent suggested that the US felt China has not met all of the US’ expectations in the agreement – including being behind on certain agricultural purchase commitments. In an interview with CNBC on 25 September, US Trade Representative Jamieson Greer said the two months were “compliance periods” for the US to assess whether China is meeting its commitments on agricultural purchases and rare earth exports.

In its 28 September readout, MOFCOM said it expects the two sides to find a “positive solution” for a further extension before the end of the year. 

Board of Trade expands planned tariff reductions to US$60 billion in products

The two sides have officially “operationalised” the Board of Trade, one of the two new cooperation mechanisms established following Trump’s visit to Beijing in May, alongside the Board of Investment. 

This has meant the release of official operating procedures and “30-FOR-30” Lists of Products Recommended for Reduced Tariff Treatment – lists of mutually agreed-upon goods for import worth US$30 billion on each side. According to MOFCOM, tariffs on around 90 percent of the products on each side will be lowered to Most-Favoured-Nation (MFN) levels, without mentioning a timeline.

The China imports list (goods imported from the US to China) lists over 1,600 items, covering mostly agricultural and aquatic products and derivatives, timber products, and foodstuffs, as well as a handful of personal care products and medical devices and equipment.

The US imports list (goods imported from China to the US) lists 77 items, covering a handful of homeware, home furnishings, and home appliances, decorative items, toys, and leisure items such as fishing equipment and art supplies.

What does this mean for businesses?

The planned reduction of two-way tariffs to MFN levels will be welcome news for producers and importers of the products involved. US$60 billion in trade is a small but not insignificant chunk of total two-way trade – around US$468 billion in 2025.

However, the products included on the list are relatively niche, and don’t cover some of the largest consumer and B2B products traded between the two countries. China’s largest export categories to the US – computers, batteries, and vehicle components, among others – remain off the negotiating table for the time being.

The MOFCOM readout notes that the two sides will “continuously expand their list of cooperative areas and shorten their list of outstanding issues”.

However, in the interview with CNBC, Greer emphasised that all export controls related to national security issues were “off the table”.

The wider impact on trade will therefore be relatively limited, but, if the initial round of tariff reductions is successful, the Board nonetheless lays the foundation for further trade negotiations in the future.

China expands coal imports from the US

The China imports list includes various coal products, including anthracite, coking coal, other bituminous coal, and briquettes, ovoids, and other solid fuel coal products, among others. It is unclear whether these items are within the scope of products that will be subject to MFN treatment or a reduction from the current tariff rate.

The White House has claimed that China has agreed to “import at least 10 million metric tons of coal from the United States in 2027 and again 2028 [sic]”. However, the Chinese side has not confirmed this figure, with the MOFCOM readout only stating that the reduction of tariffs will “be conducive to” China importing more coal from the US in 2027 and 2028 – with no mention of a specific target.

The addition of coal products to the China import list is nonetheless a significant development as it would mean the reduction of the 15 percent tariff that China imposed on US-derived coal in February 2025 in retaliation to Trump’s so-called “fentanyl tariffs”. This tariff was not within the scope of the Busan agreement and has therefore been in place ever since.

What does this mean?

The difference in wording between the US and Chinese readouts does not necessarily mean China will not seek to meet this target, but could indicate it is hedging its bets in the event of market fluctuations or changes to domestic supply and demand. China’s coal imports fell in 2025 due to low demand and ample domestic supply, which suggests it may not need US coal imports, in spite of Trump’s efforts to revitalise America’s domestic fossil fuel industry.

On the other hand, any unforeseen domestic energy crunch or increase in demand could make China more eager to buy US coal. 10 million metric tons is also only a fraction of China’s annual coal imports, meaning it could easily hit these numbers regardless of domestic demand, provided it balances purchases from other countries.

The MOFCOM statement noted that imports of US coal serve as a “beneficial supplement to China’s domestic coal market while generating stable economic revenue and employment for the US coal industry”.

This issue is a potential point of contention to look out for in the future, as missed targets would be viewed by Washington as China reneging on its commitments and could lead to further trade disputes.

AI dialogue stops short of cooperation on governance

The much-anticipated discussions on AI governance have resulted in the establishment of the “US-China AI Dialogue”, or the “U.S.-China Super Intelligence (SI) Dialogue”, as the White House has named it. This was first announced following Treasury Secretary Bessent’s meeting with Chinese Vice Premier He Lifeng in Washington on 20 September.

The dialogue will include a mechanism for notifying AI incidents “rising up the national security level”, CNBC reported at the time, which has been confirmed by the White House and MOFCOM readouts.

According to MOFCOM, the two sides exchanged “views on the risks and benefits associated with artificial intelligence” during the inaugural dialogue, and the two sides have agreed to hold the next dialogue by the end of November. 

What does this mean for businesses?

The AI dialogue is a far cry from the kind of cooperation on AI governance that many had called for, which includes a global initiative to cap AI development.

Between Trump’s insistence that AI does not pose a threat and China’s rejection of an AI slowdown, there appears to be little appetite on either side to place any significant guardrails on the technology’s development. 

China will continue to regulate AI development on its own terms, which in recent times has included formulating regulations for the development of AI agents and updating and expanding the Artificial Intelligence Safety Governance Framework to cover new risk categories.

Companies operating in the space or utilising AI products in China should continue to monitor and abide by China’s domestic AI regulations, but should not expect convergence with US regulations or those of other countries in the near future.

How Dezan Shira & Associates can help

With the US-China truce now extended only to 10 January 2027 and the first tariff reductions under the Board of Trade awaiting implementation, businesses trading between the two markets face a short window in which to plan. Dezan Shira & Associates provides supply chain and tariff advisory to help companies monitor these developments as they unfold, assess how changing tariff and export control conditions affect their sourcing and cross-border exposure, and adjust accordingly. Contact us to discuss how these changes affect your business.