Has Trump Met His Match in China?

• The US is indicating a trade truce extension with China, but regardless of the ultimate outcome, tariffs are likely to remain elevated between the world’s two largest economies.

• For now, a quid pro quo on rare earth flows from China and the loosening of some US export controls is emerging.

• Possible US tariffs on China over its purchases of Russian and Iranian oil add a wild card to talks.

US President Donald Trump has said the US is close to extending a ceasefire in the US-China trade war beyond an Aug. 12 deadline, teeing up the possibility of a meeting in the fall with Chinese President Xi Jinping. The trade truce reached in May and built upon in follow-up meetings between US and Chinese negotiators has seen the world’s two largest economies reduce sky-high, tit-for-tat tariffs and the easing of export restrictions on rare earth magnets and certain technologies. A failure to extend the truce could see tariffs shoot back up.