US, China Said to Favor One-Year Extension of Trade Truce as Xi Weighs CEO Delegation

The US and China are poised to extend their trade-war truce for another year, preserving the framework of their existing agreement as both sides seek to avoid fresh clashes.

Chinese officials are also discussing including leading business executives in President Xi Jinping’s delegation for his September visit to the US. The move would underscore efforts by Washington and Beijing to manage their continuing disputes over advanced technology and trade.

The South China Morning Post reported on Aug. 28, citing multiple people familiar with the negotiations, that the two sides have reached broad consensus on extending the trade-war truce they agreed to in Busan last year.

Xi is expected to meet President Donald Trump in Washington on Sept. 24. Under last year’s Busan agreement, the US lowered some tariffs on Chinese goods and delayed additional restrictions on Chinese companies. China, for its part, agreed to suspend some rare-earth export controls for one year. The two sides also agreed to cooperate on purchases of US soybeans and controls on fentanyl precursor materials.

A central issue at next month’s summit is likely to be the length of the extension. China prefers a longer renewal that would keep the current deal in place through the end of Trump’s term, while the US wants another one-year extension. One person told SCMP that China views the current agreement as favorable to its interests and wants to lock it in for a longer period. For now, a one-year extension appears the leading option.

The US and China are also discussing the possibility that Xi could travel with a large group of Chinese business leaders. When Trump visited Beijing in May, he was accompanied by the chief executive officers of Tesla, Apple, Nvidia and Boeing. That has fueled expectations that Beijing will assemble its own business delegation on a reciprocal basis, though people familiar with the matter gave conflicting accounts of which side raised the idea first.

Beijing is particularly interested in including companies that want to invest in the US, according to the report. The push is seen as an effort to restart talks on an investment committee arrangement that was agreed at the May summit but later stalled.

That has raised the possibility that Chinese companies under consideration for the bilateral trade committee framework could join the delegation. The committee is discussing tariff-cut benefits for non-sensitive sectors and products.

Even ahead of next month’s summit, lower-level friction between the two sides is continuing. The US recently banned the import and sale of new foreign-made products in robotics and power inverters, sectors where China is strong. Washington also added more than 40 Chinese companies to the list covered by the Uyghur Forced Labor Prevention Act.

China has also tightened export controls on drones and sanctioned seven US companies. SCMP said both governments appear to be managing individual disputes in trade and technology separately from the leaders’ summit. Existing disputes and new frictions, it said, are unlikely to derail broader efforts to stabilize ties.

Kim Eun-jung, Beijing correspondent, Korea Economic Daily, kej@hankyung.com