Bessent Says US and China Extend Busan Trade Truce to January 10, Not the Two Years Beijing Wanted

Since Donald Trump and Xi Jinping struck the original Busan trade truce in South Korea last October, the deal has already needed one lifeline to stay alive. On Wednesday, September 23, Treasury Secretary Scott Bessent announced the second one: a two-month extension, pushing the expiration from November 10 to January 10, 2027.

"We have agreed today that we will extend what we call the Busan Agreement, the economic detente between the two countries that was scheduled to end on Nov. 10, that is going to be extended until Jan. 10 to give us more time to see what we can do on the economic front," Bessent told Fox News' Bret Baier on "Special Report."

The announcement landed the same day Xi arrived in Washington for his first state visit to the U.S. in 11 years, ahead of a Thursday summit with Trump at the White House. Bessent said he and Chinese Vice Premier He Lifeng spent roughly 12 hours in talks in New York on Sunday, September 20, at JPMorgan Chase headquarters, then met again Wednesday in an unscheduled follow-up in Washington, according to Benzinga and Anadolu Agency.

China Wanted Two Years. It Got Two Months.

Bessent was blunt about the gap between what Beijing asked for and what it got. Asked why the extension ran two months instead of the two years China reportedly wanted, Bessent told Benzinga, "I don't know whether a bigger deal can be done," adding that the U.S. wants to see China follow through more fully on existing commitments before committing to anything longer.

"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 more fulsome in enacting the agreement," Bessent said, according to Newsweek.

Bessent told Benzinga that China has bought the 25 million tons of soybeans it promised, but remains roughly $17 billion behind on other agricultural purchase commitments the U.S. is "encouraging them to pick up."

What the Original Deal Did, and What's Still Broken

Under the original Busan framework, the U.S. cut its fentanyl-related tariff on Chinese goods from 20% to 10%, bringing the overall U.S. tariff burden on Chinese imports from 57% down to 47%, according to reporting cited by PrimeXBT from CNBC and Investing.com. In exchange, China suspended sweeping export controls and pledged to buy at least 12 million metric tons of U.S. soybeans in the final two months of 2025.

Rare earths remain the unresolved flashpoint. Washington says China has not fully honored its rare-earth commitments under the original deal. China controlled more than 70% of global rare-earth mining and over 87% of refining and production in 2024, according to the U.S. Geological Survey, and its export curbs halted Ford's Explorer production in Chicago for a week earlier amid magnet shortages, PrimeXBT reported.

Bessent also floated a possible "30 by 30" arrangement, in which both countries would remove tariffs on $30 billion worth of non-critical goods each, plus potential announcements on financial services and agricultural purchases in the coming days.

AI Notifications, and China's Tepid Response

Beyond tariffs, the two sides used Sunday's New York talks to propose something new: a bilateral AI safety notification mechanism. Bessent told reporters the U.S. side pushed for a system to flag AI-related incidents that rise to a national security threat level, according to CNN.

"We think that, just like with any cross-border activity, that moving from opaque to more transparency between the number one and the number two AI powers in the world is very important," Bessent said.

China's response was lukewarm at best. State news agency Xinhua's readout only briefly acknowledged the two sides had "frank, in-depth and constructive exchanges" on trade and economic issues, without specifically endorsing the AI proposal, CNN reported. U.S. Trade Representative Jamieson Greer said existing export controls on advanced AI chips and semiconductor equipment were not part of those discussions.

The Case for the Extension, and the Case Against It

Supporters of the rollover approach can fairly argue it avoids a disruptive tariff spike heading into the holiday shipping season and keeps supply chains for goods like rare-earth magnets from freezing up again, as they briefly did at Ford's Chicago plant. A short extension also gives U.S. negotiators leverage. Rather than lock in a long-term deal while China is behind on delivering, Washington keeps the clock short and the pressure on.

The skeptical read is just as fair. Two extensions in under a year suggests this is less a durable trade deal than a series of short-term truces papering over the same unresolved disputes: rare earths, the $17 billion agricultural shortfall, and a $14 billion Taiwan arms package that Trump has left pending for months after calling it a "negotiating chip," per PrimeXBT. A truce that keeps getting rolled two months at a time isn't a settlement. It's a stall, and Bessent's own words, "not perfect," concede as much.

Bessent said he and Xi could meet as many as four times this year, including Thursday's Washington summit, an earlier Beijing meeting in May, and additional sessions planned in Shenzhen and at the G20 in November. Whether Thursday's Trump-Xi meeting produces a broader agreement or simply confirms the January 10 rollover as the extent of progress remains the open question heading into the summit.