US and China Reach Trade Pact to Dial Down Tensions

On 26 June 2025, US President Donald Trump announced that a deal with China has been struck. Then on 27 June 2025, a spokesperson from China’s Ministry of Commerce confirmed that an agreement has been reached but did not give out much detail.

The deal was reached after a phone call between US President Donald Trump and Chinese President XI Jinping. The negotiating teams first met on 9 June 2025 in Geneva, then met again in London to confirm the deal. A US official commented that the US and China reached an additional understanding for a framework to implement the Geneva agreement. It is worth noting that the deal comes after the US initiated Operation Midnight Hammer in an attempt to disable Iran’s nuclear capabilities on 22 June 2025.

US Treasury Secretary Scott Bessent underlined the rare earth elements (REE) component of the deal which will ensure access to these #CriticalMinerals to US. China’s Ministry of Commerce stated that: “China will, in accordance with the law, review and approve eligible export applications for controlled items. In turn, the US will lift a series of restrictive measures it had imposed on China.”

The stock markets welcome the apparent easing of tensions between Beijing and Washington. With details scarce and hard to find, certain analysts speculate that US social media will get access to the Chinese market in return for Tik Tok to stay in the US. Otherwise, the US will buy out and own Tik Tik in order for it to continue to operate in the US.

As part of the deal, it is believed that the US will consider cancelling the plan to expel Chinese students from US universities. It is worth noting that Xi Jinping’s only daughter Xi Mingze was enrolled at Harvard University.

Donald Trump revealed that the two leaders issued reciprocal invitations to each other for a state visit. Chinese observers believe that Victory Day Parade planned by China in September 2025 could be an excellent opportunity for a US state visit.