Two days of talks in New York failed to settle how long the US China tariff truce will run past Nov. 10, leaving importers to price a summit outcome they cannot yet see
NEW YORK, Sept. 22, 2026. American and Chinese negotiators spent Sunday at JPMorgan Chase’s Manhattan headquarters working through the terms of an extension to the tariff truce that expires on Nov. 10, and emerged without one. By Monday morning the U.S. Trade Representative was telling a television audience that the gap had not closed, that Washington could live with a deal of three to six months, and that the matter would now go to the two presidents.
“Our sense is we aren’t going to have the extension today,” Ambassador Jamieson Greer said in an interview on Bloomberg Television on Sept. 21, “but again we still have some time before that happens.”
That is the state of play heading into a Trump and Xi summit in Washington on Thursday, the most consequential scheduled event on the trade calendar this quarter. For importers, exporters and the customs brokers who serve them, the practical question is narrow and urgent: whether the tariff schedule in force on Nov. 11 looks like the one in force today, and how much notice anyone will get.
What happened over the weekend
Treasury Secretary Scott Bessent and Greer met Chinese Vice Premier He Lifeng and trade negotiator Li Chenggang for an all day session in New York on Sunday, Sept. 20, on the margins of the United Nations General Assembly. Bessent posted confirmation of the meeting from his official account that day.
“In New York City, Vice Premier He Lifeng and I are continuing our discussions on the U.S. China economic and trade relationship ahead of @POTUS’ historic summit with President Xi in Washington,” Bessent wrote.
Asked afterward how the session had gone, Bessent described it as “very successful.” Speaking to reporters, he framed the objective in broad terms: “We want a shared vision of common goals and common threats.”
The agenda, according to accounts of the meeting, covered three tracks. The first was the truce itself and its expiry date. The second was the flow of rare earth elements and rare earth permanent magnets, where Washington contends Beijing has not delivered on export commitments. The third, and the one that appears closest to producing a deliverable, was artificial intelligence, with the two sides working toward an agreed dialogue mechanism and a safety notification protocol to be put in front of the presidents on Thursday. Bessent indicated that officials would meet again in roughly two months in Shenzhen to continue the AI risk discussion.
Greer’s Monday remarks added an institutional detail that has received less attention than it deserves. He said the U.S. China “Board of Trade” mechanism is now operational, and that teams on both sides are working to identify categories of goods that could be given separate treatment from the headline tariff structure. On the Chinese side, Greer indicated, the likely candidates are consumer goods and lower technology items. On the American side, the categories under discussion are energy, agriculture and possibly medical devices.
“The focus is on stability between the US and China and we are continuing that,” Greer said.
He was less accommodating on minerals. Greer attributed the persistent uncertainty over rare earth and strategic mineral supply to Beijing’s handling of its export licensing, a criticism that has become a fixed feature of American statements since the summer.
The minerals number
Data released by China’s customs administration on Sunday, Sept. 20, gave that criticism an empirical anchor.
Chinese exports of rare earth permanent magnets to the United States fell to 512 tonnes in August, down 20 percent from July and 13 percent below the same month a year earlier. The declines were not confined to the American market. Shipments to Japan were down 17 percent year over year, and shipments to Germany were down 22 percent.
The figures need context to be read correctly. The trough in this trade was 46.4 tonnes in May 2025, at the height of the export licensing freeze that followed the first round of escalation. At 512 tonnes, August 2026 volumes are more than ten times that low point. The flow has not stopped. But it is drifting downward at precisely the moment Washington had expected it to normalize, and the direction of travel is what negotiators are reacting to.
There is a second dynamic underneath the licensing question. Reuters reported on Sept. 4 that some Chinese suppliers have independently declined to ship to U.S. customers since early August, following Beijing’s decision to sanction the Responsible Business Alliance, with at least four refusals documented. That is a different problem from slow licensing, and a harder one to fix at the negotiating table, because it reflects commercial risk assessment by individual firms rather than a policy lever a government can pull.
Analysts at Capital Economics, in a research note circulated Sept. 21, read the pattern as deliberate. “Beijing appears willing to test the limits of the truce,” the firm wrote. “It has deliberately kept licence approvals slow and selective.” The same note described Europe’s dependence on the same supply as leaving the bloc “in a difficult position,” a reminder that the magnet question is not bilateral even when the negotiation is.
Markets priced the summit before the summit
Equity markets did not wait for Thursday.
The Philadelphia Semiconductor Index rose 3.2 percent on Monday, Sept. 21, its strongest session in six weeks. Advanced Micro Devices closed at $608.87, up 9.17 percent, touching a trillion dollar valuation intraday before finishing the day at a market capitalization near $987 billion. Intel gained 9.7 percent, Arm Holdings 10.2 percent and Nvidia 2.8 percent. The Nasdaq Composite closed up 0.77 percent.
The move extended to Asia. South Korea’s Kospi rose about 1 percent to roughly 7,000, with Samsung Electronics up 4 percent, SK Square up 5 percent and SK Hynix up 1.13 percent.
The proximate catalyst appears to have been a private dinner President Trump hosted on Sunday evening with a group of technology chief executives including Jensen Huang of Nvidia, Sam Altman of OpenAI, Tim Cook of Apple, Cristiano Amon of Qualcomm and Satya Nadella of Microsoft. Markets read the guest list as a signal that semiconductor and AI questions would feature in Thursday’s discussion, and that the direction would be toward accommodation rather than escalation.
That is a substantial inference to draw from a dinner. It is also a reasonable illustration of how thin the informational basis for current market positioning is. Nothing has been agreed. The truce still expires Nov. 10.
Background: how the truce came to matter
The current arrangement is the survivor of a year in which the legal foundation of American tariff policy was substantially rebuilt.
On Feb. 20, 2026, the Supreme Court held 6 to 3 that the International Emergency Economic Powers Act does not authorize the President to impose tariffs of indefinite scope. That decision invalidated the tariff program that had been the administration’s principal instrument through 2025 and into early 2026, and it triggered a refund process that has since returned tens of billions of dollars to importers. As of Aug. 21, roughly $132.5 billion in IEEPA refunds had been accepted into Customs and Border Protection’s Consolidated Administration and Processing of Entries system, with $106.6 billion completed and sent to Treasury.
The administration’s response was to rebuild on statutory ground the Court had not disturbed. Section 232 of the Trade Expansion Act of 1962 now carries the sectoral program: steel, aluminum and copper at 50 percent on covered articles and 25 percent on derivatives; semiconductors at 25 percent on advanced computing chips and manufacturing equipment since Jan. 15; pharmaceuticals at up to 100 percent; drones since Sept. 3; polysilicon from Dec. 4. Section 301 of the Trade Act of 1974 carries the country-wide program, most notably the forced labor action that took effect July 24 and applies 10 or 12.5 percent duties to goods from 60 economies, China among them at the higher rate.
China’s own measures, applied under the framework that emerged from the Busan discussions, include 15 percent duties on American chicken, wheat, corn and cotton and 10 percent on other agricultural goods. Those have been in place through the truce period and were not altered by the weekend talks.
What the truce does, in essence, is hold both sides’ escalatory options in abeyance while the structural conversation proceeds. Its expiry does not automatically trigger new tariffs. It removes the commitment not to impose them.
The unannounced overcapacity finding
There is one item on the American side that negotiators have not discussed publicly and that importers should track closely.
Bloomberg reported on Sept. 17 that USTR has completed findings in a Section 301 investigation into Chinese industrial overcapacity, that an additional duty of 7.5 percent is among the contemplated actions, and that the announcement is expected to be held until after Thursday’s summit. USTR has not confirmed the report, and no notice has appeared in the Federal Register.
If accurate, the timing is telling. A 7.5 percent overcapacity duty stacking on top of the 12.5 percent forced labor duty, existing Section 301 China lines and applicable Section 232 sectoral rates would represent a meaningful escalation delivered days after a leaders’ meeting. Holding it back is either a goodwill gesture or a reserved instrument, and the distinction will only become clear after the fact.
The allied track running in parallel
One reason Washington can afford a measured posture toward Beijing this week is that the reshoring program it is using as leverage has begun to produce commitments from third countries.
Nikkei Asia reported on Sept. 18 that Tokyo and Washington are in discussions over a logic chip fabrication plant in the United States valued at between two and three trillion yen, roughly $12.7 billion to $19.0 billion, to be funded under Japan’s $550 billion investment pledge from its tariff framework agreement and operated by GlobalFoundries. Working level talks were held Sept. 14 and 15. Nothing has been signed.
Taiwan has a different arrangement. Under a memorandum of understanding concluded in January 2026, Taiwanese investors building U.S. capacity receive a duty free import quota equal to 2.5 times planned domestic capacity during the construction phase, falling to 1.5 times once the facility is in production. That structure, which effectively subsidizes the transition period with tariff relief on imports, has become a template the administration has referenced in other sectoral negotiations.
The pattern matters for the China talks because it changes the alternative. A tariff regime that simply raises costs on Chinese goods without creating a substitute source is politically fragile. A tariff regime paired with allied capacity commitments is more durable, and negotiators on the American side have been explicit that durability is the point. It also explains why Section 232, with its investment-linked relief mechanisms, has displaced the blunter instruments that preceded it.
There is a counterweight. Allied capacity takes years to build, and the chips, magnets and refined materials in question are needed now. Every fabrication plant announcement is a promise about 2029 or 2030. The truce is about November.
What it means for importers and exporters
Several practical points follow for U.S. businesses on both sides of the flow.
For importers of Chinese-origin goods, the planning problem is that the Nov. 10 date sits in the middle of the peak season booking and landing cycle for spring inventory. Goods ordered now for February arrival will be on the water or in transit when the truce lapses. The conventional hedge, pulling forward entries to land before a deadline, carries its own risk this year: Commerce demonstrated on Sept. 22, in a separate polysilicon rulemaking, that it is prepared to restrict pre-tariff stockpiling by immediate-effect regulation. That rule is sector specific and does not reach general merchandise, but it establishes that the front-running window is no longer assumed to be safe.
For exporters, the Board of Trade discussion is the one to watch. If energy, agriculture and medical devices are genuinely being carved out for separate treatment, American producers in those categories stand to gain relief from Chinese retaliatory duties that has not been available since the retaliation was imposed. The agricultural relief in particular would be commercially significant given the 15 percent rate on wheat, corn and cotton. Nothing has been agreed, and Greer’s framing was that teams are “working on” the arrangement rather than that it exists.
For anyone in semiconductors, the operative uncertainty is Phase 2 of the Section 232 chip action. Commerce Secretary Howard Lutnick confirmed on Sept. 2 that a second phase is coming, that relief will be tied to U.S. manufacturing investment, and that scope may extend to laptops, games consoles and data center servers. No proclamation had issued as of Sept. 22. A summit that produces an AI framework may also produce clarity on the chip timetable, or may delay it further.
For those with rare earth exposure, the August magnet number is the more reliable signal than any statement from either capital. Buyers should assume continued licensing friction through the fourth quarter, should verify that their suppliers’ licenses cover the specific grades and end uses they need rather than the supplier generally, and should be aware that commercial refusal, distinct from licensing denial, is now a documented failure mode.
The economics of an extension
It is worth being precise about what a three to six month extension would and would not accomplish, because the phrase has been used loosely.
An extension preserves the current applied rate structure on both sides. It does not roll anything back. Chinese goods entering the United States continue to carry whatever combination of Section 301 forced labor duty, legacy Section 301 China lines, Section 232 sectoral duty and ordinary column one rate applies to the specific tariff line. American agricultural exports continue to face the 15 percent Chinese duty on the principal grain and fibre lines. The truce is a ceiling, not a floor.
What an extension buys is planning certainty, and the value of that is not trivial. Ocean transit from Chinese ports to U.S. West Coast terminals runs roughly three to five weeks, and to East Coast terminals via the Panama or Suez routings considerably longer. Add order lead time, and a buyer placing an order today for a product manufactured to specification is committing capital against a duty rate that will be determined months after the purchase order is signed. A six month extension covers that cycle. A three month extension covers about half of it.
That asymmetry is why the duration question, which can look like a detail, is the substance of the negotiation. Chinese negotiators have an interest in a longer horizon because it stabilizes export orders. American negotiators have an interest in a shorter one because it preserves leverage. The reported three to six month band is the visible edge of that trade.
The revenue dimension deserves a mention as well. The effective average U.S. tariff rate for 2026, excluding the impact of IEEPA refunds, has been estimated at around 7.2 percent, several times the pre-2025 baseline. Tariff collections have become a material line in federal receipts, and analysts have consistently argued that this creates its own gravitational pull against liberalization. Pete Mento, director of global trade advisory services at Baker Tilly, put the point bluntly earlier this year in the context of the pharmaceutical tariffs: “I’ve never met a politician that didn’t love revenue.” The observation generalizes.
The shape of Thursday
Two outcomes are plausible and one is unlikely.
The plausible ones are a short extension, in the three to six month band Greer described, paired with an AI dialogue announcement and possibly a Board of Trade framework; or a longer extension traded for specific Chinese commitments on magnet licensing volumes. Either would be read positively by markets that have already priced something in that direction.
The unlikely outcome is a collapse. Neither side has an evident interest in letting the truce lapse without replacement, and the fact that both delegations spent a Sunday in New York rather than leaving the work to the leaders suggests both want a communiqué with content in it.
The residual risk is the one nobody at the table is discussing publicly: that a deal on Thursday is followed within days by an overcapacity determination that Beijing treats as bad faith. Trade policy over the past two years has repeatedly produced sequences in which a conciliatory meeting is followed by an unrelated action from a different authority, and the pattern has eroded the value of summit outcomes as a planning input.
Importers would be well advised to treat Thursday as information rather than resolution, and to keep contingency scenarios live through the fourth quarter. The tariff schedule that matters is the one published in the Federal Register, and as of Tuesday afternoon, nothing new had been.
A practical checklist before Nov. 10
Companies with material China exposure have roughly seven weeks. Several steps are worth taking now rather than in reaction.
Map the exposure by tariff line, not by supplier. Because duties now stack across multiple authorities, the total rate on a given product can differ substantially from the rate a purchasing team assumes. An accurate line-level landed cost model, built from the current Harmonized Tariff Schedule rather than from historical entry summaries, is the prerequisite for any scenario planning.
Identify which entries can move and which cannot. Goods with long manufacturing lead times, made-to-order specifications or seasonal delivery windows have limited flexibility. Commodity items with multiple qualified suppliers have more. Separating the two tells a buyer where contingency effort is worth spending.
Review contract language on duty allocation. Incoterms determine who pays, but many supply agreements written before 2025 are silent on what happens when a duty rate changes mid-contract. Where a supplier bears the duty under a delivered duty paid arrangement, a November increase becomes a supplier solvency question rather than a cost question.
Confirm first sale and valuation positions. With rates at current levels, the arithmetic on first sale for export, duty drawback and foreign trade zone admission has changed materially. Programs that were not worth the administrative overhead at a 3 percent rate can be worth it at 20 percent or more.
Watch the Federal Register rather than the press. The overcapacity finding, if it comes, will arrive as a USTR notice with an effective date, and effective dates in the current environment have frequently been days rather than weeks after publication. A monitoring process that depends on secondary coverage will be a day or two behind, and a day or two can be an entire vessel.
Finally, resist the temptation to read Thursday’s photographs. Summits produce statements of intent. Duties are created and removed by legal instruments with docket numbers. The interval between the two has been the most expensive place for importers to stand for the past two years, and there is no reason to expect this quarter to be different.