Context: an announcement, few certainties
On Thursday evening, during a press conference at the White House, former US President Donald Trump announced that he had signed a trade agreement with China. Without entering into detail, Trump described the deal as a “historic” turning point, stating that “China will open up like never before”. However, no official document has been released, and on the Chinese side the information remains fragmentary.
One agreement among many still pending
According to reports from Il Sole 24 Ore, the agreement with Beijing is one of the few to have been formally signed — against a long list of deals “in the final stretch” that nonetheless remain shrouded in uncertainty. The very tariff suspension announced by Trump on 9 April is due to expire on 9 July: if not extended, it could reignite new tensions. Against this backdrop, the agreements appear more like tactical instruments than genuine long-term strategic pillars.
Beijing’s position
The following day, China’s Ministry of Commerce confirmed the existence of a “framework of understanding” with the United States, specifying that among the principal points is the controlled authorisation of rare earth exports — materials that are fundamental to the global high-tech industry. In exchange, Washington is expected to ease certain restrictions imposed in recent years in the context of the trade war.
What is truly at stake
Rare earths: a strategic resource
Rare earths are a group of 17 chemical elements indispensable for the production of advanced electronic components, electric vehicles, wind turbines, drones, and semiconductors. China holds approximately 60% of global production and, in recent months, had severely restricted their export as a lever of geopolitical pressure.
Under this new agreement, Beijing commits to issuing export licences to the United States, whilst Washington has signalled its readiness to withdraw certain trade countermeasures once the supplies are received.
Tariffs and duties: a partial truce
On the customs tariff front, the developments are less significant.
The negotiations launched in May in Geneva and continued in London produced a declaration of intent between US Commerce Secretary Howard Lutnick and Chinese Vice Premier He Lifeng. The agreement provides for the suspension or reduction of certain restrictive measures, but not the complete elimination of tariffs.
Still in force, for example, are the duties on steel, aluminium, and certain categories linked to chemical and pharmaceutical products, such as fentanyl. And above all, the general 10% tariff introduced by Trump following “Liberation Day” on 2 April remains active. Certain sectors, such as the automotive industry, remain subject to tariffs of up to 25%.
Impact on the two economies
United States
In the first quarter of 2025, US GDP contracted by 0.5% on an annual basis. One of the triggering factors was the pre-emptive increase in imports by businesses, in anticipation of new tariff rises. Investors remain nervous, also because — according to Il Sole 24 Ore — Trump’s trade strategy continues to change course, fuelling uncertainty and volatility in the financial markets.
China
The slowdown is even more pronounced. Between January and May, Chinese industrial profits fell by 9%, with the automotive sector among the hardest hit. Restrictions on rare earths and semiconductors have further dampened international investment in the country.
The agreement, if fully implemented, could mitigate these adverse effects and initiate a phase of greater stability for both economies.
Outstanding issues
Lack of transparency
Despite the announcements, concrete details are lacking: the exact terms of the agreement are not known, nor are the timescales for the entry into force of the agreed measures. Beijing speaks of a “framework”, but without reference to dates or trade volumes.
Persistence of tariffs
The agreement does not bring the trade war to an end: many tariffs remain in force, particularly in sectors most sensitive to American national security. Furthermore, the deadline for the tariff suspension is approaching: if it is not extended, the deal could prove ineffective.
Geopolitics and new alliances
Washington may seek to replicate the agreement’s model with other strategic partners, such as India or the United Kingdom, but Il Sole 24 Ore cautions: many negotiations are blocked by political obstacles and technical divergences, and risk producing weak and ambiguous deals.
Why this agreement matters
Technology and security
Rare earths are the backbone of the technological and green transition. More stable access to them is fundamental for sectors such as electric vehicles, defence, and artificial intelligence.
Market stabilisation
A truce, even a temporary one, between the US and China can reassure investors and provide breathing space for equity markets, which are particularly sensitive to geopolitical surprises. However, the sense of instability and ambiguity could dampen the recovery of investment.
A negotiating model to replicate
The logic of exchange between technological liberalisation and tariff reduction could represent an important precedent for future multilateral trade negotiations. But without clarity and continuity, the model risks remaining unapplied.
Conclusion: a fragile but significant truce
The agreement between the United States and China, albeit currently lacking a detailed framework, represents a first step towards a commercial détente after years of tensions.
Yet many uncertainties remain: the true scope of the deal, its practical implementation, and its long-term impact are all aspects yet to be verified.
As former European Trade Commissioner Cecilia Malmström also underlines, Trump could “continually change his mind” — and with him the balance of the entire global trading system.
In a world where economic dynamics are increasingly intertwined with geopolitical ones, this truce — however fragile — is a signal to be observed with close attention. Above all for those who view the markets from a global, medium-to-long-term perspective.