U.S. and China Agree to Stick to Prior Trade Truce After Tensions Escalated
New York Times4 days
This framework represents crucial progress in preventing economic warfare between the world's largest economies. The deal addresses China's weaponization of rare earth exports while offering a path to reduce crippling tariffs that have damaged global supply chains. Smart diplomacy prevailed over destructive confrontation.
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The newly announced framework may signal progress, but it stops short of resolving the deep-rooted structural issues that have long plagued U.S.-China trade. Without clear commitments or enforcement mechanisms, it risks becoming yet another temporary pause rather than a lasting solution. Markets remain cautious, noting that trust is fragile — and tariffs are likely to remain high regardless.
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In today's interconnected global economy, the U.S. and China need each other — plain and simple. The new trade framework hammered out in London reflects this mutual dependence. America relies on critical Chinese resources, such as rare earths, while China depends on U.S. technology and market access. This deal isn't just diplomacy — it's a recognition that shared prosperity demands cooperation.
There's a 4% chance that there will be an active war between the U.S. and China before 2027, according to the Metaculus prediction community.