China

The United States and China entered November in a managed truce. Trump and Xi met in Beijing in May and again at the White House during Xi's state visit in late September, and adopted the phrase "constructive strategic stability" to describe the relationship (CSIS; White House). The September meeting produced a two-month extension of the trade truce to 10 January 2027, a new US-China Board of Trade charged with recommending lower tariffs on about $30 billion of non-sensitive goods in each direction, and an AI dialogue (Nikkei Asia). China's suspension of its October 2025 rare-earth export controls runs on the same clock. On technology, the administration agreed to H200 sales to China in return for a 25% fee to the US government and cleared about 10 Chinese buyers in May, while Blackwell-class chips remain barred (Reuters).

The new Congress alters the domestic politics of China policy, while the instruments stay with the executive. China hawks exist in both parties, and a Democratic majority is likely to attack the "constructive strategic stability" framing and the H200 licenses, using hearings, letters to Commerce and the annual NDAA to press for tighter chip controls, outbound-investment rules and Taiwan support. It can legislate export-control mandates with Republican help, and bills that codify chip restrictions could attract veto-proof margins in a way that tariff bills will not. It cannot set tariff rates, grant or deny licenses, or negotiate with Beijing.

Beijing's public reaction was restrained. The foreign ministry called the election "an internal affair of the United States," cited "the important consensus reached by the two heads of state" and said China was willing to build a "constructive, strategically stable" relationship (NPR; Al Jazeera). Chinese leaders have two options. They can bank the truce and wait for a weaker president to concede more at the APEC summit in Shenzhen later this month, or they can hold back purchases and rare-earth licenses to test whether Trump, needing a foreign-policy success, will offer more on chips or Taiwan. Either reading treats the midterms as reducing Washington's staying power, and the Economist Intelligence Unit's Chim Lee expects "fragile stability" to persist (Reuters).

Trump's levers are intact, and the calendar favors their use. He travels to the ASEAN summit in Manila on 16–18 November and then to the APEC meeting in Shenzhen on 18–19 November, his third meeting with Xi this year (The Straits Times; The Guardian). China said on 4 November that talks were under way for a three-way meeting with Trump and Vladimir Putin at the summit (Politico Europe), which would put Beijing at the center of both the trade truce and the Ukraine diplomacy. The evidence to watch is whether he trades chip access or Taiwan arms timing for purchase commitments. Trump has said he is holding a $14 billion Taiwan arms package "in abeyance," and Secretary of State Marco Rubio said in September that arms sales are "always balanced" against US needs (CRS); Congress is likely to read the delay as linkage to the China talks.

For companies the near-term risk sits in January. If the truce lapses on 10 January without a successor, China's rare-earth controls and the US tariff and affiliates-rule suspensions all return at once. Firms that rely on H200-class sales into China face a second risk from Congress, which can make those licenses politically costly even if it cannot revoke them. The links to Taiwan, semiconductors and critical minerals are developed in the cross-cutting section.