EL7 Research · Macroeconomics
11 November 2026 · US-China trade truce
The two countries extended the suspension of tariffs, export controls and sanctions until 9 and 10 January 2027, after Washington had proposed a three-to-six-month extension. But China's 10% tariff, US Section 301 tariffs and rare earth restrictions issued in April 2025 all remained in force. In the soybean market, funds had cut their record bet on a broader deal by 46.2% before the extension was announced.
On 9 November, one day before its expiry, China extended the trade truce with the United States by two months until 10 January 2027. A trade truce is a mutual, temporary suspension of punitive measures without repealing them. China's State Council Customs Tariff Commission kept the additional 24% tariff on US goods suspended, but retained an additional 10% tariff. China's Ministry of Commerce (MOFCOM) and customs authorities suspended six announcements issued on 9 October 2025 imposing export controls, meaning government restrictions on exports. These restrictions cover rare earths, a group of metallic elements, their technologies and battery materials. On the US side, the Office of the United States Trade Representative (USTR) extended 178 tariff exclusions until 9 January, while the Bureau of Industry and Security (BIS) at the US Department of Commerce delayed a rule extending export restrictions to subsidiaries until 10 January.
Less was suspended than the headline suggests. China's 10% tariff remains, alongside a 13% tariff on US soybeans. Exports of seven medium and heavy rare earth elements have still required a licence since April 2025, because this restriction was never among the suspended measures. On the US side, tariffs under Section 301 of the Trade Act (Section 301) on Chinese goods remained at rates between 7.5% and 25%. This provision allows tariffs on trade practices deemed unfair. A 12.5% tariff imposed on 24 July 2026 also remained after the US Supreme Court struck down the emergency tariffs. The extension repealed no measure; it tied all suspended measures to a single date.
The duration itself is the message. Before the September summit, Washington proposed a three-to-six-month extension; the extension granted was two months. Beijing's announcement gave an explicit reason: China is waiting to see how Washington will replace Section 301 tariffs with those struck down by the courts, and will adjust its countermeasures “in due course”. Between now and 10 January are three milestones: the Asia-Pacific Economic Cooperation (APEC) summit in Shenzhen on 18 and 19 November, the G20 summit in Miami on 14 and 15 December, and the new Congress convening with its Democratic majority on 3 January, seven days before the deadline.
Markets showed little reaction to the extension announcement. The offshore yuan (Offshore Yuan, CNH), meaning yuan traded outside mainland China, rose just 0.05% on 9 November, having gained 6.34% since the Busan summit in October 2025. Speculative funds entered the September summit with their soybean net long position at its highest level in the history of Commodity Futures Trading Commission (CFTC) reports since 2006. A net long position is the number of long contracts minus short contracts. Funds then cut this position by 46.2% over six weeks. The market had therefore reduced its bet on a broader agreement before the limited extension was announced.
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