US and China Extend Trade Truce While Tensions Over Taiwan, Iran and AI Persist

At a high-level meeting in Washington, Donald Trump and Xi Jinping extended the trade truce first negotiated in Busan, now set to run until Jan 10 2027. China is roughly halfway to its 25-million-tonne soybean commitment but lags on the $17 billion of other US agricultural goods it pledged to buy, while rare-earth exports to the United States dropped 21% in August, leaving American firms waiting months for licences. In New York, Treasury Secretary Scott Bessent and Vice-Premier He Lifeng formalised a US-China artificial-intelligence dialogue, creating a notification mechanism for AI emergencies with national-security implications.

The summit did not resolve Beijing’s demand for a US declaration opposing Taiwanese independence, nor Washington’s push for Chinese pressure on Iran, with the US keeping a $13 billion arms package for Taiwan as a bargaining chip. The piece argues that a carefully managed rivalry, rather than outright collusion, permits other nations to retain agency and practice “omnidirectional hedging.”