Chinese president Xi Jinping arrived in Washington today for a multi-day summit with Donald Trump, an encounter markets have been watching for days as the week’s principal market mover. Just hours before the meeting, US Treasury Secretary Scott Bessent announced that the trade truce between the two powers, due to expire on November 10, would be extended by two months, to January 10, 2027.

From Busan to Washington

The truce dates back to the agreement signed by Trump and Xi on October 30, 2025, in Busan, South Korea, on the sidelines of the APEC summit — a package of reciprocal commitments lasting one year. Under it, Beijing agreed to suspend for twelve months its global export controls on rare earths (lithium, germanium, antimony, graphite), to lift tariffs on American agricultural products, and to buy large volumes of US soybeans, while Washington halved fentanyl-linked tariffs from 20 percent to 10 percent and extended a number of tariff exclusions.

Several of these commitments were scheduled to expire right around November 10, 2026: the two-month extension announced today by Bessent is therefore meant to buy time before the entire package has to be renegotiated.

AI, Taiwan, and the Iran question

Beyond the trade file, the summit agenda includes at least three other open issues. The first is artificial intelligence: Trump aims to assert US technological and economic superiority in the sector, though he has somewhat softened his harsher rhetoric on deregulation in recent days to help the negotiations along. The second is Taiwan, where Beijing continues to press against a US arms sale to the island valued at an estimated $14 billion (roughly €13 billion) — a matter Xi himself has already called potentially explosive if “handled poorly.” The last is Iran: the crisis between Washington and Tehran, with its knock-on effects on fuel prices, remains an indirect point of friction between the two delegations.

Markets: cautious, but with the extension already priced in

On the eve of the meeting, Wall Street traded largely flat and cautious (the Nasdaq 100 and Dow Jones were down around 0.2 percent in the Wednesday, September 23 afternoon session, while the S&P 500 was essentially unchanged), while oil extended its recent slide: Brent moved into the $100-a-barrel range (-0.77 percent) and WTI traded around $90 (-0.74 percent). The picture is consistent with a market that had already largely priced in an extension of the truce as its base case, rather than a breakdown.

Some more cautious voices remain, however. Scott Kennedy, an expert on US-China relations at the Washington-based CSIS think tank (Center for Strategic and International Studies), predicted ahead of the summit a “relatively disappointing” meeting “with a limited number of concrete results,” noting that neither Washington nor Beijing appears ready for a structural reset of the trade relationship. Trump himself, asked about the substance of the meeting, offered only general remarks: “We’ll talk about a lot of things, it will be a great meeting,” he said.

The truce extension reduces, for now, the risk of a fresh global tariff shock that would hit Italian and European exports to China and the United States across the board, along with stocks most exposed to the semiconductor and rare-earth supply chains. But it is a two-month extension, not a structural agreement, and reciprocal tariffs remain above pre-2025 levels.

Taiwan and the race for artificial intelligence remain the two fronts where a sudden deterioration could reopen the truce before its new January 10 deadline — just as the United States heads into the midterm election campaign this November.

Editor’s note

This article was originally published in Italian on money.it by Ufficio Studi Money.it on September 24, 2026 as «Trump e Xi a Washington. La tregua sui dazi si allunga di due mesi, fino al 10 gennaio 2027». It has been translated and adapted for an international audience by the Money.it International desk.