US-China Tech Cold War Thaws—Export Controls Eased as Both Sides Blink

The world''s two largest economies just pulled back from the brink—for now.

After months of escalating trade tensions, Washington and Beijing struck a deal to loosen export restrictions on critical tech components. No winners declared, no champagne popped—just a temporary ceasefire in the semiconductor arms race.

Wall Street shrugs while Main Street pays

Market reactions were predictably muted—another ''truce'' in a conflict that''s become as routine as quarterly earnings misses. Meanwhile, small businesses still face 300% tariffs on electronics imports. But hey, at least the hedge funds got their volatility play.

Navigating Export Curbs, Market Volatility, And Regulatory Uncertainty

Framework Agreement Details

Officials finalized the US & China reach deal during midnight talks at Lancaster House, and both sides are awaiting presidential approval at the time of writing. Commerce Secretary Howard Lutnick confirmed the agreement addresses export curbs that had threatened the trade truce between the two nations.

Lutnick stated:

China’s Vice Commerce Minister Li Chenggang also confirmed that both sides had reached a trade framework during the negotiations.

Li Chenggang stated:

A rare phone call between TRUMP and Chinese President Xi Jinping last week gave the negotiations an extra boost, providing directives that officials later merged with the Geneva truce agreement.

Export Restrictions Resolution

The US & China reach deal specifically targets rare earth export curbs that had disrupted global supply chains and created regulatory uncertainty. China suspended its restrictions on critical minerals exports in April, prompting the US to respond with its own export curbs on semiconductor software, chemicals, and other technology goods.

Lutnick said:

This balanced approach aims to preserve the trade truce while addressing the regulatory uncertainty around critical supply chains that has been affecting businesses worldwide.

Market Impact and Timeline

Markets showed cautious Optimism following news that the US & China reach deal, with Asia-Pacific shares rising 0.2% right now. However, market volatility continues as both sides face an August 10 deadline for comprehensive negotiations to finalize their trade truce.

The World Bank cut global growth forecasts to 2.3% this week, citing higher tariffs and trade tensions as headwinds. Chinese exports to the US dropped 34.5% in May, highlighting the stakes involved in preserving the trade truce and reducing export curbs.

Chris Weston from Pepperstone stated:

Josh Lipsky from the Atlantic Council’s GeoEconomics Centre said:

If negotiations fail by August, tariff rates will snap back dramatically – from about 30% to 145% on the US side and from 10% to 125% on China’s side. This regulatory uncertainty continues to weigh on investor sentiment despite the framework agreement that officials reached.

The deal represents progress in managing export curbs and market volatility, though significant challenges remain ahead for both nations as they work to maintain their trade truce.