NextFin news, The White House, on November 2, 2025, released a detailed fact sheet delineating the newly forged trade agreement between US President Donald Trump and Chinese President Xi Jinping. This announcement followed their meeting in Busan, South Korea, on October 30, 2025. Central to the accord is China’s commitment to suspend previously imposed export controls on rare earth elements and related critical materials—such as gallium, germanium, antimony, and graphite—which are vital for high-tech manufacturing and defense industries globally. The agreement further includes China terminating investigations into US semiconductor supply chain companies, a significant concession given the sector's strategic importance.
The framework mandates China to issue general licenses facilitating these exports, effectively reversing restrictive measures introduced in April 2025 and October 2022. Concurrently, the US will pause implementation of certain tariffs initiated under Section 301 for an additional year, including shelving plans for a proposed 100% tariff on Chinese goods. Another aspect involves the US reducing fentanyl-related tariffs from 20% to 10%, contingent on China enhancing enforcement against opioid precursor exports. China also pledges to resume substantial purchases of US agricultural commodities, committing to 12 million tonnes of soybeans in the current season and at least 25 million tonnes annually for the next three years.
These developments point to a carefully calibrated trade détente, aimed at de-escalating the tariff-and-tension cycle that has materially disrupted bilateral trade relationships and global supply chains since 2018.
Examining the underpinnings of this deal, the suspension of rare earth export restrictions represents a strategic pivot from Beijing, acknowledging the critical dependency of US and global high-tech sectors on these materials. Rare earths, fundamental to electronics, electric vehicles, aerospace, and defense systems, have been a contentious lever amid US-China competition. China's prior export curbs, particularly those initiated in 2022, had threatened to destabilize supply security for these sectors worldwide, underscoring Beijing's capacity to wield supply chain control as a geopolitical tool.
By rescinding these controls and halting semiconductor-related probes, China signals a willingness to mitigate immediate supply chain risks and trade retaliations. This shift likely responds to pressure from US tariff exclusions set to expire imminently and the economic ramifications of prolonged trade frictions on Chinese export sectors. Additionally, it aligns with China's broader strategic calculus under President Xi Jinping to stabilize economic relations amid mounting external pressures and internal economic recalibration.
From the US perspective, President Trump’s administration is strategically leveraging tariff adjustments and enforcement actions as bargaining chips to extract concessions on market access, intellectual property enforcement, and policy predictability. The tariff pause and exclusion extensions offer domestic industries temporary relief and supply chain stabilization, vital given the ongoing challenges in semiconductor manufacturing and agricultural markets.
Quantitatively, the commitment by China to purchase upwards of 25 million tonnes of soybeans annually signals a return to substantial market engagement with US farmers, offering a boon to the US agricultural sector, which suffered from retaliatory Chinese tariffs and export bans since 2018. For context, the US exported approximately 37 million tonnes of soybeans to China in 2017, showing potential for renewed trade volumes to approach pre-trade war levels over time.
However, this accord must be understood as a provisional truce rather than a comprehensive resolution. The measures, formally agreed to last one year, leave unaddressed broader geopolitical flashpoints such as technology dominance struggles, human rights issues, Taiwan, and the continuing global ramifications of Russia’s war in Ukraine. The US’s conditional rollback of fentanyl tariffs tied to China's crackdown on opioid precursors also integrates public health concerns into trade negotiations, expanding the deal’s scope beyond pure economic considerations.
Practically, the agreement is poised to recalibrate global rare earth markets and semiconductor supply chains. By restoring Chinese export flows of rare earths, global manufacturers reliant on uninterrupted raw material supplies can expect easing of cost pressures and inventory bottlenecks. Market data reflecting rare earth prices since 2022 had shown elevated volatility and spikes following China's export constraints; the suspension agreement can usher in price normalization and reduced supply chain risk premiums.
Nevertheless, market actors and policymakers remain cautious. The temporary nature of the deal implies that strategic competition between the US and China continues beneath the surface, with both sides maintaining tactical flexibility. Future trade dynamics will likely be influenced by geopolitical developments, technological security concerns, and domestic political pressures within both countries. Additionally, the unresolved TikTok sale by ByteDance and cooperation on energy trade (notably Alaskan oil and gas exports to China) highlight ongoing sectors of negotiation and contestation.
Looking forward, this trade deal may provide a template for future limited-scope agreements that prioritize tactical economic stability while deferring intractable strategic issues. It may encourage companies in high-tech manufacturing, agriculture, and energy sectors to cautiously recalibrate investment and supply chain strategies, factoring in a somewhat reduced risk of aggressive trade barriers over the next year. Investors will likely monitor tariff exclusion expiry timelines, enforcement of drug precursor controls, and progress in technology transfers and intellectual property protections as indicators of the pact’s durability.
In summary, the White House’s disclosure of the US-China trade deal reveals a nuanced attempt to de-escalate immediate trade tensions through reciprocal concessions on rare earth export controls, tariffs, and agricultural trade. While it mitigates some risk factors for global supply chains and provides short-term economic relief to involved sectors, the agreement ultimately stops short of a strategic resolution. The coming year will be critical in assessing whether this tentative truce matures into a more stable trade relationship or reverts amid underlying geopolitical rivalries.
According to Bloomberg and Taipei Times reporting, this accord marks a significant, though provisional, development in the ongoing economic competition between the world’s largest economies, underscoring the complex interplay of trade policy, technological security, and geopolitical strategy in shaping global markets in 2025 and beyond.
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