US and China Truce: What the 90-Day Trade Pause Means for the World

The blog explains the recent 90-day US and China truce, exploring its impact on trade, factory output, rare earth exports, and global markets. It highlights what the truce means for industries, unresolved issues, and the possibility of long-term peace amid ongoing geopolitical uncertainty.

A Surprising Break in the Storm

For months, tensions between the US and China seemed like they would only get worse. Trade barriers were rising, tariffs were piling up, and both economies were starting to feel the pressure. Then, almost out of nowhere, came a welcome break: a US-China truce, giving both sides a 90-day breather.

The 90-day trade truce doesn’t solve everything, but it’s an opportunity. It’s a chance to step back from the brink and talk things through. And for industries caught in the crossfire—tech, manufacturing, agriculture—it couldn’t have come at a better time.

Let’s take a closer look at what this means for both countries, and the rest of the world watching closely.

What Exactly Is the Truce?

At its core, the US and China truce is a temporary pause on additional tariffs. It began in May 2025, after weeks of quiet diplomacy. Now, negotiators are working to extend it another 90 days, buying even more time for serious talks.

Here’s what the agreement includes:

• No new tariffs for 90 days.
• A freeze on existing tariffs: 30% on Chinese goods to the US, 10% on US goods to China.
• Renewed access to rare earth minerals exported from China to the US.
• Weekly talks to work on bigger structural trade issues.

The idea? Cool things down while real negotiations happen behind the scenes.

A Lifeline for Factories and Farms

Across both countries, the reaction was instant. The impact of the China-US trade truce on factory production was especially visible.

In China, factory managers in places like Guangzhou and Shanghai reported a surge in orders. Exporters rushed to fulfill delayed shipments. Workers were rehired. Machines that had gone quiet roared back to life.

Meanwhile, in the US, soybean and corn farmers breathed a sigh of relief. Chinese buyers returned after months of holding back, now that tariffs were temporarily off the table. The pause gave American agriculture a much-needed shot in the arm.

And it wasn’t just about goods. Shipping companies, port operators, and global logistics chains all saw activity pick up. The US and China truce sent a clear signal: trade is flowing again, at least for now.

Businesses Jump at the Opportunity

A few weeks into the truce, many American companies began taking advantage of the break in hostilities. Tech giants like Apple and Intel—both deeply connected to Chinese supply chains—quickly moved to resume paused projects. Warehouses started filling up again.

Even smaller businesses that import tools, auto parts, or clothing reported smoother operations. The U.S.-China tariff truce gave them breathing space to restock inventories and stabilize pricing.

Factories on both sides of the Pacific benefited. And as a result, global trade numbers ticked upward for the first time in months.

The Truce in Numbers

Let’s break it down with a few hard facts since the truce began:

• Chinese factory output rose by 9% within 30 days of the deal.
• US soybean exports to China surged by 21%.
• Ocean freight rates on Pacific routes dropped by 12%, thanks to smoother customs processing.
• Stock indexes in both countries saw modest but steady gains.

Clearly, the U.S.-China 90-day trade truce wasn’t just symbolic. It has had a very real economic impact.

What’s Still on the Table?

But let’s be honest. A truce is not a peace treaty. This 90-day pause doesn’t solve the big stuff—not even close.

Here’s what’s still unresolved:

• China’s policies on intellectual property and tech transfer.
• US restrictions on exporting advanced chips and AI software.
• Broader questions around currency manipulation and state subsidies.
• China’s concerns over US export controls and foreign investment rules.

These are the issues that started the trade fight in the first place. And they’re not easy to fix.

Even though the US and China truce brought temporary calm, negotiators know they’re facing a mountain of tough conversations.

The Trump Factor

One big wild card? President Donald Trump.

While US trade officials described the recent meetings in Stockholm as “productive,” everyone knows that Trump has the final say. His approval is needed to extend the U.S.-China trade truce beyond the original 90 days.

So far, he’s hinted that he might be on board. With an election coming and inflation a hot issue, keeping tariffs low—for now—might play well with voters.

But Trump has reversed course before, even at the last minute. So until he signs off, nothing is guaranteed.

What Happens If Talks Collapse?

Let’s imagine for a moment that the truce isn’t extended. What would happen?

• Tariffs could snap back to 100% or more on certain goods.
• US businesses might once again face supply disruptions and cost hikes.
• Chinese exports could dip sharply, especially in tech and textiles.
• Farmers may lose their newly regained market access.
• Markets would likely react with volatility and investor uncertainty.

In other words, we’d be right back where we started. That’s why extending the US-China truce is such a high-stakes decision.

Rare Earths: A Strategic Piece of the Puzzle

One fascinating part of the truce: China’s decision to resume exports of rare earth elements to the US. These minerals are essential for smartphones, electric cars, and even fighter jets.

During the trade war, China threatened to restrict these exports—a move that would have hurt US tech and defense industries deeply.

Now, with the U.S.-China tariff truce in place, rare earth shipments are flowing again. But the US isn’t taking any chances. Efforts to develop alternative sources in Australia, Canada, and Africa are ramping up.

This part of the truce shows how deeply strategic and technological this trade conflict really is.

What the World Thinks

Europe:

EU leaders welcomed the truce, noting it gives breathing room to European manufacturers who supply both markets.

Japan & South Korea:

Both countries are watching closely. Their exports often travel through China or rely on US components.

Emerging Markets:

In Bangladesh, Vietnam, and Indonesia, exporters hope the calm lasts. Many have benefited from companies shifting manufacturing away from China, but still rely on stable global trade.

Will the Truce Become a Long-Term Deal?

Here’s the big question: Can this truce turn into something permanent?

It’s possible. Negotiators are talking, both sides are seeing short-term gains, and there’s even talk of a Trump-Xi summit before the year ends.

But there’s also history to consider. These two nations have clashed before, and not just over trade. Cybersecurity, geopolitics, military alliances—the list goes on.

For now, the US and China truce is just that: a pause. Whether it turns into peace is still anyone’s guess.

Frequently Asked Questions

Final Thoughts

The US and China truce has brought a bit of stability to a chaotic trade landscape. The 90-day trade pause has helped factories ramp up, farmers sell more crops, and companies plan ahead.

But underneath it all, tensions remain. Tariffs could come back. Negotiations could stall. The next few weeks will tell us a lot about what’s coming next.

For businesses, investors, and governments, one thing’s clear: pay attention. Because what happens between the US and China doesn’t just affect them, it affects all of us.