After tariff truce extended, a Trump-Xi summit in China?

AUSTIN, Texas – The United States and China appear to be pulling back from their trade war, with President Donald Trump extending a pause on tariffs in what could be a prelude to a summit with his Chinese counterpart Xi Jinping in Asia.

The world’s two largest economies have decided to

set aside threats to impose triple-digit tariffs on each other for another 90 days,

according to an executive order signed by Mr Trump on Aug 11 hours before an existing 90-day trade truce with China was set to expire.

A likely venue for a bilateral meeting between the two presidents could be Kuala Lumpur, which is hosting Asean’s East Asia Summit from Oct 26 to 28. Both leaders have confirmed they will attend the summit.

The other possibility is the sidelines of the Asia-Pacific Economic Cooperation (Apec) leaders’ summit in 2025, to be held from Oct 31 to Nov 1 in Gyeongju, South Korea.

But there is a third possibility, which might hold special appeal for Mr Trump and, according to some observers, would be more in keeping with his penchant for dramatic actions: a quick trip to China.

The Straits Times has learnt from sources close to the administration that preparations are under way in Washington for a possible US presidential trip to China between the Asean and Apec meetings.

Officials in Beijing are also on standby.

Things could change, however, as it is still early days, said a source asking for anonymity to discuss sensitive information.

Should it take place, the meeting would be the most critical between world leaders in 2025.

“It is probably not a coincidence that the summit is supposed to be at the end of October, before the trade truce expires on Nov 9,” said a Washington-based source close to US officials planning the trip.

“Everything we’re hearing is that they are still working towards a leaders’ meeting,” he said, adding that it could come with the expectation that China helps the US broker a ceasefire in the Russia-Ukraine war ahead of Mr Trump’s Aug 15 meeting with President Vladimir Putin.

“The reading we got was that the Chinese side is pretty pragmatic and very much signalling it wants more foreign investment in China. And if the trip is very economic- and business-focused, the venue could even be Shanghai,” said the source. 

Already, US companies are preparing a list of demands, although it is unclear if such a visit would include a large business delegation.

“If there were obstacles that were too destabilising, there would not have been a truce,” said the source. 

Mr David Meale, a former US diplomat who has served in Beijing, Taipei and Hong Kong, said: “We have heard that maybe China would be interested in Trump going to somewhere outside of Beijing. Nothing is settled at this point – we could be looking at a side meeting at Asean or Apec or a trip to Beijing or somewhere else in China.

“I sense that both sides want that to happen very much, and that the timing for it is wonderful.”

“There’s enormous frustration in the US government about China’s role in helping Russia re-industrialise during the conflict in Ukraine,” added Mr Meale, now the practice head for China and North-east Asia at the New York-based Eurasia Group, a political risk consultancy. 

“However, my reading of the way the US is engaging with China is that there’s probably room for a lot more depth in those conversations, and that is probably not taking place at this point.”

Anticipating a turning point ahead, Professor Graham Allison, the best-selling author of several books, including Destined For War: Can America And China Escape Thucydides’ Trap, has predicted that it would be a fast track from the extension of the truce to a Trump-Xi summit that announces a “new partnership”.

“I have just signed an Executive Order that will extend the tariff suspension on China for another 90 days. All other elements of the Agreement will remain the same,” he said in a social media post.

Had the truce expired, Chinese goods entering the US would be subject to at least a 54 per cent duty. 

In a late-night Truth Social post on Aug 11, Mr Trump hinted that China might step up its purchases of soya beans from American farmers, one of his key political constituencies.

“China is worried about its shortage of soya beans,” he wrote. “I hope China will quickly quadruple its soya bean orders. This is also a way of substantially reducing China’s trade deficit with the US.”

China, the top customer of US soya bean farmers, bought more than US$12 billion (S$15.4 billion) worth in 2024.

Mr Trump also mysteriously thanked Mr Xi in his post, without saying why.

China’s Commerce Ministry announced on Aug 12 a parallel pause on additional tariffs on US goods for 90 days. It also removed or suspended for 90 days export control measures on some US companies.

The US President, who places great store by personal diplomacy, has himself also spoken about a possible visit to China in 2025.

“He (Mr Xi) asked for a meeting, and I’ll end up having a meeting before the end of the year,” he said in a TV interview on Aug 5.

Prof Allison said a thaw lies ahead. 

“My hazy crystal ball suggests that Trump will announce a new ‘great partnership’ aimed at shifting the tone and character of the US-China relationship in a more positive direction,” he said in a post on X on Aug 12, hours after the White House announced the truce.

Mr Trump treats China differently from other trading partners owing to its strength, said Prof Allison, who is a professor of government at Harvard University, where he has taught for five decades.  

The world’s second-largest economy is closing the gap with the US economy, reporting more than 5 per cent growth in the first half of 2025, exceeding expectations amid continuing uncertainties in global trade.

The White House had calibrated its strategy, suggested Prof Allison, after seeing China hit back with 125 per cent tariffs in response to Mr Trump’s threat of 145 per cent tariffs, effectively creating a trade embargo.

It was the only such response in the world, he noted. 

More strikingly, when the US tightened some supply chain controls, China directly choked off a half-dozen critical items, including rare earth magnets that some companies in the US cannot function without. 

“In this situation, China has as strong a hand as the US, maybe stronger – and President Trump treats those he sees as equals differently from those he sees as weaker,” said Prof Allison.

Mr Trump appears eager for a high-profile visit to China, probably with the signing of a “big, beautiful trade deal”, said Mr Dennis Wilder, a former National Security Council director who teaches courses on Chinese governance at The Bush School of Government and Public Service. 

Mr Trump’s actions recently appear designed to make this possible, Mr Wilder said, noting

the reversal of the ban on the export of Nvidia’s H20 chips

despite opposition within the administration.

There was also, he told ST, the curtailment of “high-profile engagement with Taiwan and his refusal to say anything negative about China when asked by anti-China Fox News anchors”.

“Given that his initial overtures to Putin were disappointing, Trump will want to show the world his ability to win with China,” said Mr Wilder.

Ms Wendy Cutler, a senior official at the Asia Society Policy Institute and former deputy US trade negotiator, said the extension was no surprise and the path ahead would be no walk in the park.

“What remains unclear is whether the US was able to get anything in exchange for this move from Beijing, such as increased soya bean purchases or more predictable access to critical minerals and magnets,” she said in a media statement.

“Having learnt important lessons from the phase one negotiations during Trump 1.0, Beijing will be a more demanding counterpart this time around,” she noted.

US businesses welcomed the news of the truce extension.

“The extension is critical to give the two governments time to negotiate an agreement that improves US market access in China, addresses the bilateral trade imbalance and provides the certainty needed for companies to make medium- and long-term plans,” said a statement from the US-China Business Council, a non-profit association of more than 270 American companies that do business in China.

“Securing an agreement on fentanyl that leads to a reduction in US tariffs and a rollback of China’s retaliatory measures is acutely needed to restart US agriculture and energy exports,” it added, listing US companies’ longstanding demands.

Mr Zichen Wang, a research fellow at the Centre for China and Globalisation, a Beijing-based think-tank considered close to the government, said Mr Trump would get a tremendous welcome if he visited China.

“That’s in line with Chinese hospitality, (the) traditional and diplomatic playbook, as well as a show of respect for the US and President Trump himself personally,” he told ST.