US-China Trade Truce Extended

Washington (DTN) -- The U.S. and China extended the Busan Agreement, the trade truce between the two countries, to Jan. 10 while identifying more than 1,600 products, including agricultural commodities, for potential tariff reductions.

But soybeans for food and crushing were excluded from the list, and negotiators did not announce new agricultural trade commitments or a timeline for implementing the potential tariff reductions.

Following an official state visit by Chinese President Xi Jinping to the White House last week, negotiators reached a consensus on a "30 for 30" framework for reducing tariffs on $30 billion in agricultural and other non-sensitive products from both countries.

The agricultural products include crude soybean oil, corn, meat, cotton, rapeseed, sorghum, durum wheat, barley and oats.

The U.S.-China Board of Trade, formed last May, gave both countries a platform to negotiate tariff reductions, including the 10% tariff placed on most U.S. goods. A list of 1,619 products entering China, including agricultural commodities, and 77 home goods and toys entering the U.S. was developed for future discussion.

Expectations for new commitments rose last week when the Chinese delegation visited the White House for the first time since 2015. Row-crop futures opened lower after a late-Friday White House fact sheet provided few details on China's U.S. agricultural purchases.

China committed to buying 25 mmt of soybeans under last year's agreement. USDA export sales show nearly 10.2 mmt committed so far for the 2026-27 crop.

The Busan Agreement was extended to Jan. 10 from Nov. 10, maintaining existing 10% tariffs while giving both countries more time to negotiate unresolved commitments.

HOLDING, NOT FAILING

The unchanged tariff rate on soybeans was not what commodity leaders had hoped to see.

Still, agricultural groups viewed the two-month extension of the Busan Agreement as a positive development, despite no announced changes in trade volumes.

Last week, the National Grain and Feed Association applauded the extension, which continued the suspension of Section 301 fees on grain shipments.

The suspension, NGFA said, supports the competitiveness of U.S. agricultural exports while helping rebuild U.S. shipbuilding capacity.

"NGFA previously expressed concerns about implementing Section 301 fees and their potential impact on U.S. agricultural export competitiveness, when uncertainty remained over the timing and rules for implementation. This welcome extension comes at a critical time for U.S. agricultural exports," the group said in a statement.

In fall 2025, concerns grew as the Trump administration moved to impose fees on China-linked ships that docked in the U.S. China responded with countermeasures on U.S.-linked vessels, while separately tightening restrictions on rare-earth exports as broader trade tensions escalated.

While the shipping issue was extended, broader trade commitments were left for future negotiations.

The American Soybean Association said it "welcomes the two-month extension of the U.S.-China trade truce and looks forward to continued dialogue between the two countries."

The group said farmers want "continued progress that provides greater certainty and long-term market opportunities for U.S. soybean farmers."

Two more meetings between Trump and Xi are scheduled for 2026 ahead of the new Busan Agreement deadline.

Trump has accepted an invitation to attend the Asia-Pacific Economic Cooperation summit in Shenzhen in November. Xi is expected to attend the Group of 20 summit in Florida in December.

See the Trade Terms from the White House: https://www.whitehouse.gov/…

Read more on DTN: "What's Next for US-China?" https://www.dtnpf.com/…

Jake Zajkowski can be reached at jake.zajkowski@dtn.com

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