US-China Trade Truce Extended: $60 Billion in Tariffs Cut

Have you ever felt like you were watching a boxing match where both fighters are completely exhausted, but neither is willing to go down? That is exactly what it feels like to watch the trade war between China and the US over the past few years.

And recently, both sides have decided to take another "halftime break." On September 28, 2026, China's Ministry of Commerce officially confirmed the extension of the trade truce with the US for another two months, stretching the timeline from November 10, 2026, to January 10, 2027. This is not just a routine administrative decision. It is a signal that both of the world's largest economies need more time—and perhaps need each other more than they want to admit.

Join me, SilverZ, with 20 years of observing global economic shifts, as we dissect this event from its roots. Because what is happening between Washington and Beijing will directly affect your wallet, your job, and the future of Vietnam's economy.

The Extension Agreement: Numbers That Tell a Story

To understand the importance of this event, we need to look at specific figures. This is not just an "on paper" agreement—these are measurable commitments with a practical impact on millions of businesses and consumers.

First, regarding the timeline: The truce has been extended from November 10, 2026, to January 10, 2027—exactly two months. This period is not long, but it is enough for both sides to continue negotiating a larger deal.

Second, regarding tariff reductions: China and the US have agreed to mutual tariff cuts on $60 billion worth of goods—with each side responsible for cutting tariffs on $30 billion of the other's goods. This is one of the most concrete steps taken in years.

The list of goods benefiting from tariff cuts spans multiple sectors:

• From the Chinese side: Reduced tariffs on US corn, wheat, sorghum, meat, dairy products, vegetable oils, and plant meals. Fish and seafood, wood and wood products, cosmetics, and medical equipment are also on the list. Notably, soybeans—once the epicenter of the trade war—are not included in this round of cuts.
• From the US side: Reduced tariffs on Chinese small household appliances such as coffee makers and toasters, tableware, bedding, toys, fireworks, artificial flowers, Christmas tree lights, child car seats, and various other holiday decorations.

Third, regarding energy: An important part of the agreement is China's agreement to import 10 million tons of coal from the US annually during the 2027-2028 period. This is a long-term commitment that provides stable revenue for the US coal industry and supplements supply for China's energy market.

Fourth, regarding agriculture: The two sides will establish an agricultural working group under the Trade Council, with the first meeting expected to take place before the end of 2026. This group will discuss two-way market access and regulations related to agricultural products.

Why Do Both Sides Need This Agreement?

This is the most interesting part. When looking at the moves of both Washington and Beijing, we see a complex picture—where both sides are trying to achieve their own strategic goals, while simultaneously realizing that escalating tensions benefits no one.

The US Side: Tight Control Yet Needing Stability

US Treasury Secretary Scott Bessent made frank remarks about Washington's perspective. He stated that the US wants to see whether China can "fully implement the agreement" in the coming months. US Trade Representative Jamieson Greer even called these extensions a "compliance phase"—a way of indicating that Washington maintains the view that Beijing needs to do more to honor its commitments.

Yet why did the US still agree to the extension? The answer lies in concerns over strategic supply. According to analysts, the US accepting a short-term extension rather than demanding a long-term deal shows that Washington is worried about the supply of rare earth magnets—an essential component in the manufacturing of chips, electronics, and defense technology. They want to "keep this issue under tight control."

The Chinese Side: Stability Needed for Growth

On the Chinese side, the Ministry of Commerce emphasized that extending the truce creates a "relatively stable and predictable policy environment" for business cooperation. This is an important message: Beijing is trying to reassure the business community that the operating environment will not be disrupted by short-term political fluctuations.

Additionally, China's agreement to cut tariffs on US agricultural products—especially corn, wheat, and dairy products—shows that Beijing is seeking to diversify its food supply and meet domestic consumer demand. This is a pragmatic step, not just a political one.

A New Bright Spot: AI Becomes a Negotiation Topic

One of the most notable highlights of this agreement is that, for the first time, artificial intelligence (AI) has become an official topic in US-China trade negotiations.

According to a statement from China's Ministry of Commerce, the two sides agreed to establish a communication channel on AI incidents and will hold further dialogue before the end of November 2026. Previously, Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent held their first dialogue on AI within the framework of the 8th economic and trade consultation round in New York.

What does this mean? It shows that both Washington and Beijing realize AI is no longer merely a technological issue. AI is becoming a national security issue, a trade issue, and a geopolitical issue. Establishing a communication channel—even as a first step—is a positive sign that both sides want to avoid misunderstandings that could lead to escalating tensions in this sensitive sector.

However, do not expect too much. As analysts have pointed out, given the current level of competition, it is difficult to expect a comprehensive international framework for AI governance. This is only the first step—a practical "guardrail," but not yet a comprehensive solution.

Unresolved Challenges

Do not let positive signals fool you. Behind this extension agreement lie deep-seated, unresolved issues—"time bombs" that could explode at any moment.

Strategic Competition Remains Fierce

Analysts note that despite the smiles and handshakes at the summit, China and the US remain "locked in fierce competition" over trade, technology, Taiwan, defense, rare earths, and industrial policy. No trade agreement can erase these structural differences.

Lack of Concrete Results

A former US official noted that "more concrete results" must be seen for this agreement to be extended long-term. Some US officials expressed "deep disappointment" with China, arguing that Beijing has "largely failed to deliver on commitments" made in previous meetings.

Time Is Running Out

The two-month extension—rather than a long-term deal—indicates that both sides are "buying time." Analysts warn that time is running out for the world's two largest economies to resolve their strategic disagreements.

Why Does This Story Matter to Vietnam?

You might be thinking: "This is between China and the US; what does it have to do with Vietnam?"

The answer is: a great deal.

First, Vietnam is embedded in the global supply chain. When China and the US cut tariffs for each other, multinational corporations may readjust their production and distribution strategies. Some might shift orders from Vietnam to China if costs become more competitive. Conversely, if tensions flare up again, investment capital could continue flowing into Vietnam as a regional "safe haven."

Second, Vietnam is an important trading partner to both China and the US. Any changes in trade relations between the world's two largest economies have spillover effects on regional economies, including Vietnam. From raw material input costs and logistics expenses to consumer demand—everything is affected.

Third, China and the US bringing AI into negotiations is an important signal. Vietnam is in the process of building its national AI strategy and attracting investment in this sector. What is happening between Washington and Beijing will shape the competitive and cooperative environment in AI within which Vietnam must operate.

Fourth, lessons in negotiation. The way China and the US negotiate—from short-term extensions and specific product lists to establishing new communication channels—provides valuable lessons for Vietnam in international trade negotiations.

When a "Truce" Does Not Mean "Peace"

I have witnessed major economies declare a "truce" only to return to confrontation shortly after. The US-China trade truce this time is no different—it is not the end of tensions, but merely a comma in a long story with many chapters yet to be written.

What is notable is that this time, both sides are trying to create an institutional framework for their relationship—through the Trade Council, the agricultural working group, and the AI communication channel. This is progress compared to negotiating case by case. But will these institutions be strong enough to prevent a new trade war? Only time will tell.

For Vietnam, this is a time to observe, learn, and prepare. We cannot change how China and the US behave, but we can prepare for different scenarios—from shifting investment capital and restructured supply chains to the establishment of new trade standards.

In the global economic game, the winner is not the strongest, but the one who adapts the fastest.

What do you think about China and the US continuously extending their trade truce instead of reaching a long-term agreement? Is it a sign that both sides are seeking sustainable solutions, or just a way to delay an inevitable confrontation? If you are a Vietnamese business operating in import-export, how would you adjust your business strategy in the face of these uncertainties? Share your views below, because in today's globalized economy, no one can sit on the sidelines!