U.S. not quick to extend truce

U.S. Treasury Secretary Scott Bessent said on May 19 that Washington is “not in a rush” to extend the current tariff and critical-minerals trade truce with China, even though the agreement runs only through November. Bessent told Reuters in Paris that the administration saw time to renew the arrangement later this year and said Beijing was meeting its commitments on critical minerals. (usnews.com) China’s Commerce Ministry said on May 20 that Beijing wants the one-year agreement extended and that future U.S. tariffs on Chinese goods should not exceed the level set in talks in Kuala Lumpur last October. (businesstimes.com.sg) The ministry also said both sides had agreed in principle to discuss reciprocal tariff cuts on products worth at least $30 billion on each side. The gap between those positions shows the current thaw is still being managed at arm’s length. Public statements from both governments describe continued talks and limited tariff relief, not a broad rollback of the trade barriers built over the past several years. (usnews.com) ### Why is Washington resisting an early extension? Scott Bessent said in Paris that the United States was preserving room to negotiate by waiting. He told Reuters the administration was not in a hurry because the truce does not expire until November and could be addressed in later meetings this year. Reuters reported that Bessent also said he believed China would accept a restoration of prior U.S. tariff levels under some circumstances, while adding that Beijing had been satisfactorily fulfilling the agreement on critical minerals. (businesstimes.com.sg) That combination let U.S. officials signal that talks are continuing without giving up leverage now. (usnews.com) ### What exactly is China asking for? China’s Commerce Ministry said on May 20 that it hoped Washington would honor prior commitments and keep any future tariff level at or below the ceiling agreed in Kuala Lumpur. Bloomberg reported that Beijing was prepared to accept some increase in U.S. tariffs as long as they stayed within that earlier framework. (usnews.com) The ministry also said trade teams would discuss extending the one-year truce and work through a reciprocal tariff-reduction framework. China Daily, citing the ministry, said the products under discussion were valued at $30 billion or more on each side. Euronews separately reported that the planned cuts would affect at least $30 billion worth of goods per side. (wsau.com) ### How much has the trade relationship already changed? Foreign Policy said U.S.-China bilateral trade fell from about $635 billion in 2017 to about $415 billion in 2025. That drop reflects changes already driven by tariffs, sanctions and corporate “derisking,” according to the publication. (businesstimes.com.sg) The current negotiations therefore sit on top of a smaller commercial relationship than the one Washington and Beijing were managing before the trade war. Even if both sides complete the tariff cuts now under discussion, the numbers suggest only part of the earlier disruption would be reversed. That is an inference from the trade figures and the limited scope of the tariff package under discussion. (global.chinadaily.com.cn) ### What else is Beijing putting on the table? China’s Commerce Ministry said on May 20 that China would buy 200 Boeing jets and seek an extension of the trade agreement reached last year. Reuters reported that the statement marked Beijing’s first confirmation of the Boeing order. (foreignpolicy.com) The same statement also referred to expanded agricultural access and other trade items linked to last week’s Trump-Xi summit in Beijing, according to Reuters and Bloomberg-derived reports. Those additions suggest the talks now combine tariff management with targeted purchase commitments. ### What happens next before November? November is the deadline built into the current truce, and both sides have said more meetings are coming before then. (foreignpolicy.com) China’s Commerce Ministry said trade teams would discuss extending the one-year agreement negotiated in Kuala Lumpur, while Bessent said the issue could be handled in meetings later this year. (wifc.com) The next concrete step is those trade-team discussions over an extension and over tariff cuts covering at least $30 billion in goods per side. Any change in the truce would also test whether Washington keeps future Section 301 tariffs within the Kuala Lumpur ceiling Beijing says was agreed. (businesstimes.com.sg) (wifc.com)