Deal or No Deal? Trump and Xi Edge Toward Trade Truce

June 11, 2025 

In a significant development on June 11, 2025, President Donald Trump announced a provisional trade agreement with China, signaling a potential de-escalation in the ongoing trade tensions between the two nations. The announcement, made via a Truth Social post, described the deal as "done," pending final approval from both President Trump and Chinese President Xi Jinping .

Key Provisions of the Tentative Agreement

The framework of the agreement includes several notable provisions:

• Rare Earth Minerals: China has agreed to resume exports of rare earth minerals and magnets to the United States. These materials are crucial for various industries, including electronics and defense .

• Student Visas: The United States will halt plans to revoke Chinese student visas, allowing continued educational exchanges between the two countries .

• Tariffs: Despite the agreement, up to 55% tariffs on Chinese goods will remain in place. This includes 25% tariffs from President Trump's first term, an additional 20% related to China's role in supplying fentanyl precursors, and a 10% baseline tariff . In response, China will maintain its 10% tariffs on U.S. goods.

A Step Toward De-escalation

The tentative agreement follows two days of high-level negotiations in London between U.S. and Chinese officials, including Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, and Commerce Secretary Howard Lutnick . While the deal has been hailed as a step toward reducing tensions, analysts remain cautious. Some experts view the agreement as a reaffirmation of previous commitments rather than a breakthrough, noting that long-standing structural issues between the two countries remain unresolved .

Market Reactions

The market response to the announcement has been muted. Major indices, such as the S&P 500, showed minimal movement, reflecting investor skepticism about the deal's long-term impact . Additionally, concerns persist regarding the ethical implications of sourcing rare earth minerals from regions with alleged human rights abuses, particularly in China's Xinjiang province .

Awaiting Final Approval

While the agreement has been described as "done," it awaits final approval from both President Trump and President Xi Jinping. The outcome of this approval process will determine the future trajectory of U.S.-China trade relations and the broader global economic landscape.

Market Snapshot

• SPDR S&P 500 ETF Trust (SPY): $603.67 (+0.10%)

• iShares China Large-Cap ETF (FXI): $37.48 (+0.26%)

• Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR): $26.90 (+0.56%)

Note: Market data reflects the latest available information as of June 11, 2025.

The tentative U.S.-China trade agreement marks a significant development in international economic relations. While it offers potential for easing trade tensions, the path forward remains uncertain, contingent on final approvals and the resolution of underlying structural issues.