AFTER months of tensions, U.S. President Donald Trump and Chinese leader Xi Jinping have agreed on a trade deal that rolls back some of the damage caused by the U.S.-China trade war.
While hailed by Trump as a “roaring success,” analysts say the agreement largely restores the status quo rather than delivering major gains for either side.
Three-digit tariffs are off the table, but import duties between the two nations remain higher than they were in January.
Rare earth materials will flow more smoothly, though China has implemented an export permitting system that it can tighten or relax as needed.
Port fees will be suspended, but only for one year. Beijing has also resumed purchasing U.S. soybeans after previously cutting off American farmers abruptly.
Economist Eswar Prasad of Cornell University noted, “It is hard to see what major gains the U.S. has made in the bilateral relationship relative to where things stood before Trump took office.”
On the Senate floor, Minority Leader Chuck Schumer criticized the deal, saying it leaves the U.S. “no better off” and highlights the disruption caused by Trump’s trade war.
“He started a trade war, created a giant mess for businesses, consumers, and soybean farmers, and then he celebrates for trying to clean up the very mess he created in the first place,” Schumer said.
Despite criticism, the deal has introduced a measure of stability, giving both countries and the global economy time to recalibrate. Washington and Beijing must still finalize the agreement, leaving room for potential disputes.
Xi emphasized moving beyond recent tensions, noting that the “recent twists and turns offered some lessons for both sides” and urged focusing on cooperation rather than mutual retaliation.
TARIFF REDUCTIONS AND SOYBEAN RESUMPTION
Trump initiated the trade war in February with a 10% tariff on Chinese goods, citing concerns over the flow of chemicals used in fentanyl production.
Retaliatory Chinese tariffs rose to 145% before Trump rolled them back amid market instability. In May, both sides reduced their tariffs to 10%, while selective measures targeting specific goods remained in place.
Under the new agreement, the U.S. removed one 10% fentanyl-related tariff in exchange for Beijing’s cooperation in combating the illicit drug trade.
China also agreed to lift retaliatory tariffs on U.S. agricultural products and commit to buying 12 million metric tons of U.S. soybeans by January, with a minimum of 25 million metric tons annually for the next three years.
This follows a near-halt in U.S. soybean exports to China in September.
ONE-YEAR TRUCE ON EXPORT CONTROLS AND PORT FEES
China had earlier restricted exports of certain rare earth materials, prompting U.S. threats of a 100% tariff. Under the new agreement, Beijing will pause the export permitting system for a year, while the U.S. will suspend its affiliate export control rule for the same period.
Similarly, port fees imposed by both sides earlier this year will be suspended for one year, providing temporary relief to shipping and trade operations.
UNCERTAIN LONG-TERM IMPACT
While the deal stabilizes trade in the short term, fundamental issues remain unresolved. Chinese manufacturing dominance and long-standing market access barriers continue to pose challenges for U.S. businesses.
Sean Stein, president of the U.S.-China Business Council, called the developments “very encouraging” but stressed that future negotiations must address deeper trade imbalances and create predictability for U.S. companies.
Trump plans to visit China in April, with Xi expected to travel to the U.S. later, offering further opportunities for negotiation.
Kurt Campbell, former deputy secretary of state, observed, “Generally, Trump grows impatient with anything beyond the immediate, and it is the Chinese that play for longer-term advantage.”
The deal may ultimately be remembered as a temporary truce rather than a resolution of the U.S.-China economic rivalry.