US, China buy time with trade truce as pressure builds

US and China agreed to an extended trade truce, but analysts warn that time is limited for the world's two largest economies to mend their strategic rivalry. President Xi Jinping visited the US from September 23 to 25 at the invitation of President Donald Trump. Despite the summit's friendly atmosphere, both countries remain locked in a bitter competition over trade, technology, Taiwan, defense, rare earths, and industrial policy, according to Daniel Russel of the Asia Society Policy Institute.

Although both leaders expressed a desire for stability in their relationship, Daniel Kritenbrink of The Asia Group believes that further tangible outcomes are needed to ensure the truce's long-term success. Beijing has reportedly not fully fulfilled its commitments from earlier meetings, and many US officials have expressed frustration with China's actions.

Under the original agreement, China pledged to buy more US soybeans and other agricultural products, and suspend rare earths restrictions for a year. The deal was set to expire in November, but both sides have now agreed to extend it until January 10. US trade officials view these extensions as "compliance periods," with China doing just enough to maintain the agreement without making significant progress.

US officials are concerned about China's ability to deliver on rare earth magnets and maintain the agreement's effectiveness. While there has been some progress on economic outcomes, experts believe that the truce is unsustainable in the long run. They also note that the AI alert system agreed upon during the summit may be a limited step towards addressing potential AI-related threats.