US-China Trade Deal Marks Major De-Escalation, Resets Global Market Relations

The US and China have reached a landmark trade agreement that significantly reduces tensions between the world's two largest economies. President Donald TRUMP and Chinese President Xi Jinping negotiated terms that include China suspending export controls on rare earths, halting fentanyl precursor flows, and removing retaliatory tariffs imposed since March 2025.

In return, the US will implement a 10% tariff reduction on Chinese imports starting November 2025, extend Section 301 exclusions, and pause retaliatory trade actions for one year. The deal guarantees substantial soybean purchases by China—12 million metric tons in 2025 and 25 million annually through 2028—effectively resetting bilateral trade relations.

Market analysts are calling this the most significant de-escalation yet, with The Kobeissi Letter noting its underappreciated impact: "This is the BIGGEST de-escalation yet... This is not getting nearly enough attention." The agreement removes a cycle of retaliatory measures that had weighed on global markets.