A delicate truce in the trade war
Just days before Donald Trump and Xi Jinping are scheduled to meet, the United States and China announced they have agreed a framework for a trade deal designed to avert the imposition of sweeping tariffs and unlock stalled talks. According to Treasury Secretary Scott Bessent, the negotiations “set the stage” for the leaders’ meeting by outlining steps on key disputes including rare-earth exports, tariffs and agricultural trade.
What’s in the package so far
- China will delay or ease export controls on rare-earth and critical-minerals shipments that had triggered U.S. threats of 100 % tariffs.
- The U.S. will refrain from immediately imposing the additional 100 % tariff on Chinese imports that was set to begin on 1 November.
- Both sides signalled further cooperation on U.S. agricultural exports to China (notably soybeans), and broader market-access issues.
- There is mention of a deal related to the U.S. concerns over the app TikTok — specifically Chinese commitments connected to the app’s U.S. operations.
Why this matters
The U.S. and China are the world’s two largest economies; protracted trade conflict between them risks ripple-effects across global supply chains, technology-markets and raw-material flows. The emergence of a deal-framework signals a shift from escalation toward managed competition.
Markets responded positively: Chinese and Asian stocks lifted as hopes grew for a stable truce.
But don’t call it a “deal” yet
Analysts and observers caution that this is a preliminary framework, not a full agreement. Many of the same headlines have appeared before — and ultimately unraveled. Potential pitfalls remain:
- Final approvals and detailed legislation are still required in both countries.
- Strategic issues (technology, security, supply-chains) lie deep beneath the trade surface — a quick deal may paper over structural rivalry rather than resolve it.
- Either side could still walk away if domestic or geopolitical pressures mount.
What to watch next
- The actual wording of the upcoming meeting between Trump and Xi: will they sign or merely endorse the framework?
- Whether the tariff truce is extended beyond early November and to what scope.
- Implementation of the rare-earth/critical-minerals commitments: how Beijing honours export-control commitments, how Washington adjusts its tariff posture.
- U.S. farmers’ access to Chinese markets — e.g., soybeans — as a signal of substance.
- Reactions from U.S. allies, regional trading partners and global markets: will this deal shift broader trade dynamics or remain bilateral?
The bottom line
The new U.S.–China trade framework offers a pathway out of immediate escalation — but not a final destination. It reflects cautious diplomacy, not bold resolution. Whether it will translate into a lasting deal that moderates competition or simply defer it remains the central question.
