US and China extend bilateral trade truce to January 2027

The United States and China have extended their bilateral trade truce until January 10, 2027, following a state visit by Chinese President Xi Jinping to Washington. Under the agreement, China will refrain from enforcing export controls on rare earth materials, while the United States will hold existing tariffs on Chinese goods at approximately 47% rather than increasing them.

This extension provides a reprieve for the global economy as both nations prepare for upcoming summits in Shenzhen and Miami. The truce is significant due to China's dominance in the rare earth sector, controlling 60–70% of global mining and 85–90% of processing, including nearly all processing of elements essential for electric vehicles and wind turbines.

The shifting economic landscape between the two powers also presents opportunities for emerging markets. While high US Treasury yields have increased borrowing costs for African nations, falling Chinese government-bond yields may make Chinese capital markets more attractive for financing needs, such as renewable energy deployment.