U.S.–China Trade Truce Extended to January 10

Washington confirmed the U.S.–China trade truce will run until January 10, 2027, extending tariff relief and rare-earth flows beyond the November expiry. Treasury Secretary Scott Bessent announced the move Wednesday as China's leader Xi Jinping arrived for a state visit, noting Beijing must deliver more commitments. The moratorium, first struck by Xi and Trump in South Korea last October, was widely expected to be prolonged, with markets anticipating at least a six-month extension ahead of the summit.

U.S. President Donald Trump on Wednesday threatened sweeping tariffs on the European Union or even a halt to trade if Brussels proceeds with plans to make Canada its first “associate member.” Calling Canada “a terrible trade partner,” Trump said that if he views the EU’s move as hostile, he would impose “very serious tariffs or stop trading with Europe on many things.” His remarks followed European Commission President Ursula von der Leyen’s announcement that the bloc was opening the door for Canada to join under a new category of associate membership, which does not currently exist under EU treaties and would require ratification by member states.

The US trade deficit widened to $88.6 billion in July 2026, marking the largest gap since March 2025, compared with a $71.1 billion shortfall in June and market expectations of a $90 billion deficit. Exports declined 2.1% to $310.7 billion, led by lower sales of crude oil (-$4.5 billion) and nonmonetary gold (-$3.9 billion). On the other hand, shipments increased for capital goods ($1.9 billion) and pharmaceutical preparations ($1 billion). Meanwhile, imports rose 2.8% to $399.3 billion, boosted by purchases of computers ($6.9 billion), computer accessories ($6.6 billion) and semiconductors ($1.2 billion) while a fall was seen for crude oil ($-1.8 billion) and charges for the use of intellectual property ($-0.5 billion). The largest gaps were recorded with Mexico ($-27.5 billion), Vietnam ($-23.3 billion) and Taiwan ($-18 billion). The deficit with China was $15.2 billion and the balance with Switzerland shifted from a surplus of $2.9 billion to a deficit of $0.6 billion.