Short trade truce can’t paper over realities of US-China relationship
As long as the US’ transactional strategy towards China remains unchanged, the rhythm of crisis and managed de-escalation will continue
Quick Look
A recent US-China summit resulted in a two-month extension of the Kuala Lumpur trade truce until January 10, easing tariff fears while highlighting deep strategic divides.
AI-generated summary
Why It Matters
The US and China have been engaged in prolonged trade tensions involving tariffs and restrictive measures since 2018.
Zhou Xiaoming is a senior fellow at the Centre for China and Globalisation in Beijing and a former deputy representative of China’s Permanent Mission to the United Nations Office in Geneva.
Published: 4:30pm, 6 Oct 2026
The recent US-China summit yielded a narrow, caution-filled outcome for bilateral trade: a two-month extension of the Kuala Lumpur trade truce, which now expires on January 10 next year. This reprieve eases fears of immediate tariff escalation and shows that head-of-state diplomacy can still curb spiralling confrontation. Yet the short timeline exposes the wide gulf separating the two sides’ priorities.
China’s position has been unambiguous: removal of all punitive tariffs and restrictive measures imposed since 2018. Beijing has repeatedly stressed that no one wins in a trade war. Even so, it responded to the extension with goodwill. The Ministry of Commerce said the pause gave both sides time to take stock of implemented consensus and deliver stable, predictable policy conditions for businesses.
Washington offered a different narrative. US Treasury Secretary Scott Bessent portrayed the two months as a compliance review, accusing China of failing to fully meet its commitments. He and other US officials did not celebrate the pause, instead speaking of obstacles remaining before any longer truce could be agreed.
What to Watch
AI outlook — possibilities, not facts
Kuala Lumpur trade truce expires on January 10 next year.
Very likely · Within months
Open Questions
- Will the US and China reach a longer trade truce before January 10?
- Will punitive tariffs imposed since 2018 be removed?
