US-China Trade Truce Reached: One-Year Pause on Tariffs and Export Controls

President Donald TRUMP and Chinese President Xi Jinping concluded a 90-minute meeting in South Korea, resulting in a temporary trade agreement that pauses the economic conflict between the two nations for at least one year. The deal addresses key friction points, including tariffs and export controls, which have weighed on global markets.

China agreed to suspend rare earth material export controls for 12 months, while the U.S. will reduce fentanyl-related tariffs from 20% to 10%. Additionally, the U.S. will delay implementing expanded trade restrictions on entities partially owned by sanctioned companies. Notably, China committed to immediate large-scale purchases of U.S. soybeans.

In a surprising development, President Trump announced that the U.S. will mediate discussions between China and Nvidia CEO Jensen Huang regarding restrictions on advanced chip usage. The agreement also includes a reduction in overall U.S. tariffs on Chinese goods from 57% to 47%.

The détente extends beyond trade, with both nations agreeing to collaborate on geopolitical issues, including the Ukraine conflict. Market observers will watch for ripple effects across commodities, technology, and cryptocurrency sectors as the truce takes effect.