President Trump hailed a new trade “truce” with China—but experts warn the lack of detail casts doubt on its durability and efficacy.
At a Glance
- Shaun Rein cautions the U.S.–China agreement lacks key specifics and enforceable provisions
- Trump announced the deal during London talks; China describes it as a mere framework
- Rare-earth export licenses may be issued on a trial basis, not a permanent commitment
- China has diversified supply chains, reducing reliance on the U.S., giving it stronger leverage
- Markets responded with muted gains—U.S. futures edged lower even as Chinese equities rallied
Optimism Meets Ambiguity
On June 10, former President Donald Trump declared that a new trade truce with China was “done” during talks in London. The agreement, touted as a breakthrough on tariffs and rare-earth exports, was met with skepticism by experts who noted the absence of any published documentation or finalized terms.
China’s response was noticeably less definitive. According to the Financial Times, Chinese officials characterized the arrangement as a framework agreement rather than a formal, enforceable deal—an important distinction that casts uncertainty over its scope and duration.
Shaun Rein, founder of China Market Research Group, voiced concern that the deal “lacks fine print,” meaning there are no clear guidelines for implementation, dispute resolution, or verification—elements critical to its credibility.
Rare Earths on Hold
One of the central pillars of the truce appears to be a loosening of restrictions on rare-earth mineral exports. However, China reportedly plans only to issue temporary six-month licenses, rather than grant long-term access. That ambiguity has left U.S. tech and defense firms cautious, unwilling to rely on Chinese supply chains without guaranteed continuity.
China’s Strategic Advantage
Rein also emphasized how China has reoriented its trade flows in recent years. Diversification toward ASEAN and Australia has reduced Beijing’s exposure to U.S. market disruptions. This strategic pivot means China may have more leverage in shaping trade outcomes, despite American efforts to regain balance.
Market Response: Cautious Gains
Initial market reactions were muted. While Chinese and Hong Kong equities rallied modestly, U.S. futures showed minor declines, reflecting investor uncertainty over the deal’s enforceability and longevity.
Until both governments release the fine print, the so-called truce may be more symbolic than structural—an uneasy pause in an ongoing economic standoff rather than a true resolution.
