President Donald Trump and China’s President Xi Jinping will meet in Washington on Thursday and Friday for the Chinese leader’s first visit to the United States since 2023.
This time last year, the world’s two largest economic powers were locked in an escalating tariff war that increased the price of goods for consumers in both countries and created headaches for international businesses.
On Wednesday, Treasury Secretary Scott Bessent told Fox News that the U.S. and China will extend a temporary economic truce, negotiated with China last October, until Jan. 10.
That may be the most significant economic outcome for the U.S. coming out of this week’s meetings, analysts say, noting that a serene diplomatic meeting is still valuable given the not-so-distant trade hostilities.
“This is going to be very heavy on optics and symbolism,” said Edgard Kagan, the Freeman chair in China studies at the Center for Strategic and International Studies, who formerly served as the ambassador to Malaysia under both Trump and President Joe Biden.
“Both leaders are pretty invested in the idea that there needs to be a more stable, predictable relationship,” he added.
While there may be little outward change this week, there is plenty at stake economically. Here’s what you need to know.
Extending a trade truce
The most pressing issue for both sides was whether to extend a truce that has kept the worst of a trade war at bay since October 2025 — one that Bessent said had been decided Wednesday.
Under that agreement struck in Busan, South Korea, the U.S. agreed to ease tariffs against China in exchange for China stopping the flow of chemicals used to create fentanyl; resuming purchases of American soybeans; and easing a blockade on rare earth exports — minerals that are key for modern technology, appliances, vehicles and defense equipment.
The truce would have expired on Nov. 10. Despite frustrations with the agreement on both sides, the two nations had an incentive to keep it going.
China would have preferred that the truce be extended through the rest of the Trump administration so it wouldn’t have to grapple with Trump’s unpredictable trade moves, experts say. The U.S. also wanted to extend the truce, but for less time to keep up the pressure on China to release critical minerals, buy American agricultural products, and allow American companies to operate in and export to China.
The extra months may yield progress on the issues frustrating U.S. officials, Bessent told Fox after talking with Chinese Vice Premier He Lifeng on Wednesday.
“There are some deliverables that have not been perfect on the Chinese side, so we also want to see, now that we’ve sat down and told them our expectations, if over the coming months they can be a bit more fulsome in enacting the agreement,” he said.
Boosting agricultural purchases
The Chinese committed to buy more soybeans from the U.S. as part of the Busan agreement. Then, in a second deal struck when Trump and Xi met in May, China agreed to precipitously increase its purchases of other U.S. agricultural products.
The Chinese haven’t come close to meeting what the White House said was an agreement to buy $17 billion in U.S. farm goods per year through 2028.
That has frustrated U.S. officials seeking to bolster farm states that have been battered by the economic impact of tariffs and the war with Iran.
“The agriculture deliverables are going to be key for the president, particularly as he goes into the midterm elections,” said Wendy Cutler, senior vice president at the Asia Society Policy Institute and a former negotiator for the Office of the U.S. Trade Representative.
Increasing speed of rare earth exports
Businesses and U.S. officials say China has also been slow-walking exports of rare earth minerals, which it first restricted in April 2025 in retaliation for Trump’s global tariffs. The crucial minerals became China’s key leverage point in trade negotiations with the U.S.
American officials are frustrated with the pace of minerals being released but eager to maintain stability so they continue to flow.
“The Chinese have been hanging rare earths as a Sword of Damocles above the American head,” said Ryan Hass, director of the John L. Thornton China Center at the Brookings Institution. “If the Chinese were to fully cut off rare earths, it would have such a cascading effect on the health of the U.S. economy.”
Artificial intelligence
AI executives urged the U.S. and China to collaborate on standards for their technology as policymakers and industry leaders increasingly fear the potential dangers of out-of-control artificial intelligence.
OpenAI CEO Sam Altman and Elon Musk, who owns xAI, will attend the state dinner held at the White House on Thursday, along with several other tech CEOs including Amazon founder Jeff Bezos, Google CEO Sundar Pichai, Apple Chairman Tim Cook, and Meta CEO Mark Zuckerberg, according to a senior administration official. (Bezos owns The Washington Post.)
The White House expects Trump to discuss AI with Xi, but there’s little expectation for a broader agreement. The countries have divergent incentives: China is wary of anything it thinks could keep the country locked in second place as the two nations race to develop AI models, and Trump has said it is key that U.S. companies are able to stay ahead of their Chinese counterparts.
Bessent said on Sunday that he proposed a “notification mechanism” for the two nations to alert each other about AI incidents with national security implications, though the Chinese have not publicly agreed to participate.
Tariff exemptions and Chinese investment
During their May meeting, Xi and Trump agreed to create formal boards to monitor trade and investment between the two countries.
U.S. Trade Representative Jamieson Greer said Sunday that the U.S. and China had launched a so-called Board of Trade, which is expected to provide tariff reductions on $30 billion in goods for each side.
Products that don’t pose a national security risk would be eligible. Consumer goods, low-tech items, medical devices, and energy and agricultural products might qualify under the new agreement, Greer said.
But the second board, the so-called Board of Investment, “has disappeared from discussion,” said Cutler, in part because U.S. policymakers are split over what they want, even if Trump has said he welcomes Chinese investment.
There is a vocal cohort of lawmakers who oppose Chinese investment in the U.S., and some states explicitly restrict it. There are strong regulations governing foreign investment in U.S. businesses through the Committee on Foreign Investment in the United States (CFIUS), and U.S. automakers are concerned that China’s auto industry would flood the market with cheap vehicles that undermine American companies. Trump said earlier this month that he might be willing to allow Chinese car companies into the U.S. if they produced them domestically.
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