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Analysts react to US-China trade agreement
U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences. China's Vice Commerce Minister Li Chenggang said the two
Analysts react to US-China trade agreement
REUTERS
Published :
Jun 11, 2025 20:28
Updated :
Jun 11, 2025 20:28
Treasury Secretary Scott Bessent and Chinese vice premier He Lifeng meet in London. Photo : United States Treasury/Handout
U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences.
China's Vice Commerce Minister Li Chenggang said the two teams had agreed on implementing their Geneva consensus and would take the agreed framework back to their leaders.
A White House official said the deal allows the U.S. to charge a 55% tariff on imported Chinese goods. This includes a 10% baseline "reciprocal" tariff, a 20% tariff for fentanyl trafficking and a 25% tariff reflecting pre-existing tariffs. China would charge a 10% tariff on U.S. imports.
MARKET REACTION:
Equity markets and the dollar were muted, with S&P 500 up 0.1%, while awaiting more detail of what was decided and whether it would stick.
QUOTES:
GENE GOLDMAN, CHIEF INVESTMENT OFFICER AT CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA:
"Equity markets breathed a sigh of relief on news of a potential US-China trade deal. However, I would take this news with a bit of caution. While President Trump indicated favorable news that imports on Chinese imports would rise from 30% to 55% and Chinese rare-earth exports may resume, there is little news on what China gets in return. I doubt this is a one-way deal and hence the market caution seen overnight."
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH, ALLENTOWN, PENNSYLVANIA:
“We’ve seen a relatively muted reaction to the news of a ‘deal’ with China, and to me that signals indifference. It says, OK, you have agreed to continue talking and set up a framework for future talks, but nothing all that significant has really been resolved. The market is saying, tell me something worth knowing about. And we all know that if we don’t have a comprehensive solution, it’s not going to be good. It would mean we have to purchase our 30 dolls for Christmas somewhere else, which will be much more expensive.
"This is just my own reading of this, but in the face of better-than-expected inflation numbers today, the market is struggling to hold onto its gains and I can only think that it’s that people needed to see more from the China talks. Perhaps investors sold on strength, out of the opinion that we’re overbought at this stage.”
OLIVER PURSCHE, SENIOR VICE PRESIDENT, ADVISOR, WEALTHSPIRE ADVISORS, WESTPORT, CONNECTICUT:
"It's a done deal according to President Trump, but we haven't seen any details, which is why I think the market is not reacting to it yet. As with just about everything, the devil is in the details... The other big piece of news is the U.S. and China seem to have a framework for further discussions, and that contradicts a statement of, it's a done deal.
"This morning's inflation report, while softer than expected, was largely due to falling energy prices and an indication of a further slowdown in U.S. economic activity."
ADAM BUTTON, CHIEF CURRENCY ANALYST, FOREXLIVE, TORONTO:
“Obviously, it's good news that China and the U.S. have reached some sort of agreement, and Trump has certainly tried to spin it positively. But it's not clear what path the U.S. and China are on and what they're trying to achieve. Trump hinted at this, saying he wants to expand China trade. In some ways, the U.S.-China talks have created more questions than answers. Is this tariff rate going to stick? And what exactly are the U.S. and China working towards?
“The ultimate takeaway on China is that things aren't getting worse. So, that's good. We probably built in some expectations of maybe material progress.”
JOHN PRAVEEN, MANAGING DIRECTOR, PALEO LEON, PRINCETON, NJ:
"The worst-case scenario is probably behind us. There's a little bit of face saving for both sides. From the U.S. point of view the rare earth thing was a big deal. They got an agreement. The question is whether it will be implemented. The fact they have some kind of agreement is probably at least a relief for the market."
"Both sides got a little bit of what they wanted. The fact that things that things are de-escalating is the important point. It's probably a relief for the markets."
"We'll have to wait and see if they will further scale it down. When the dust settles it will probably come down a little bit further because this level of tariff will probably cause inflationary pain for the consumer."
"When Trump and Xi meet they'll probably scale it down further. You need to save something for that meeting."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
"That's good news, obviously. We're still waiting for the full details, and it has to be ratified by both Trump and Xi, but I think that's a foregone conclusion that it will be. That's good news and relieves worries... Of course, the real thing is there is an agreement that would allow perhaps China to resume its exports of rare earth products, which I think was key to this."
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT:
"It's at least a positive headline. The exchange of technology for rare earth materials is a positive and it's encouraging that the two countries are trying to work together. We'll see if Xi will approve it and we'll see what Trump does."
WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY"
“It's getting clearer that the initial round of big, high levels of tariffs were negotiation tactics. And when you finally saw what were the chips that each side had on the table - China with its rare earth and then the US with different kind of trade related chips, including the impact to any students at universities here - you got some clarity on them both wanting to come to an agreement of sorts. Now that's good news for the market.
"However, the market had already anticipated that because that the rally that we saw from the tariff lows was already beginning to bake in a better outcome than what had initially been being put out. So the proof of that was that when the agreement was announced late last night to early this morning, you saw the futures actually begin to decline. So it felt like a little bit of sell-the-news type of situation as opposed to a real market impact because a lot of the anticipated benefits had been backed in.
"The incremental news that’s moving markets right now is the CPI print. On the longer term, the trade impact from tariffs will be interesting to see. Many folks are saying tariffs are inflationary but then other folks are saying it will be deflationary. But I think the truth will be somewhere in between.”
CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE:
"The devil will be in the details but the lack of reaction suggests this outcome fully expected.
"While clearly a positive outcome, the lack of reaction in S&P500 futures, and the incremental moves seen in CNH or AUD, suggests achieving the framework on the Geneva agreement was fully expected – the details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported."
LIN GENGWEI, CO-FOUNDER AND CEO, RAIN TREE PARTNERS, SINGAPORE:
"Both sides have the pressure, and willingness to reach an agreement. This is temporary achievement in talks but will not alter the pattern of perennial Sino-U.S. rivalry.
"The U.S. will not completely remove restrictions on chip exports to China, but may relax the curbs in response to pressure from both Beijing and the domestic semiconductor sector."
MARK DONG, CO-FOUNDER OF MINORITY ASSET MANAGEMENT, HONG KONG:
"This is positive news to the market. At least now there's a bottom line that neither side is willing to cross.
"Going forward, both sides will move toward reducing the trade imbalance."
ZENG WENKAI, CHIEF INVESTMENT OFFICER, SHENGQI ASSET MANAGEMENT, HONG KONG:
"The market likely anticipated this — Trump is just TACO (Trump always chickens out)."
"Look at how countries are negotiating with the U.S. these days; it’s no longer like how Vietnam approached things early on. Japan and South Korea are taking a tougher stance. People have realised that kneeling gets you nowhere — in fact, it only invites more bullying."
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:
"Markets will likely welcome the shift in tone from confrontation to coordination. But with no further meetings scheduled, we’re not out of the woods yet. The next step depends on Trump and Xi endorsing and enforcing the proposed framework.
"It’s important not to mistake this tactical de-escalation for a full reversal of strategic decoupling. The underlying competition around technology, supply chains, and national security remains very much intact. New issues can always emerge, and the real test will be how far this "new old deal" is implemented."
TAN XIAOYUN, FOUNDING PARTNER OF ZONSO CAPITAL, GUANGDONG:
"Talks will continue under the agreed framework, and I believe the U.S. will give in more than China to reach a deal."
"Under the current circumstances, the U.S. side faces more pressing challenges, while the Chinese side has more breathing space. China was defensive, but has turned offensive, leveraging on rare earth and market access. This marks a rebalancing in strength and clout."
MICHAEL MCCARTHY, CHIEF EXECUTIVE OFFICER, MOOMOO AUSTRALIA, SYDNEY:
"I'll be watching to see how bonds trade today on the back of this. The currency markets are taking it in stride, and given the equity markets are back to all-time highs or thereabouts, it does appear that this was very much anticipated.
"For weeks, there have been expectations of the deal. The delivery of it will likely be a market positive, with a weakening dollar and stronger equities, but it’s not a step change."
CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:
"I think in this environment... any hints on progress on a potential trade agreement will be positive for markets.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."
RAY ATTRILL, HEAD OF FX STRATEGY AT NATIONAL AUSTRALIA BANK, SYDNEY:
"It's way too early to say that we know we're in the midst of establishing a cast iron, new US-China trade agreement. The whole year has been littered with positive omens about reaching agreements and then we haven't really seen substantial progress or we've seen backsliding on things that were seemingly agreed so.
"Our view is still that whatever does get agreed in the coming weeks and months, the baseline view is that we're going to end up with a global tariff situation which is far worse than existed prior to Trump's ascent to the presidency so we're still going to have a tariff environment we believe will be detrimental as far as global growth is concerned."
TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:
"If we keep the terms of the Geneva Agreement, we're looking at US tariffs on Chinese goods staying at 30% for a period of time and Chinese tariffs on US goods at 10%. So that's down from 145% and 125% respectively. That would be fantastic.
"Now that for me was probably the market consensus ... and now people just trying to work out whether they're gonna buy or sell the US dollar and that's I think reflecting a bit of that indecision.
"That's why U.S. equity markets are holding at this point of time. I still feel like they're overcooked and they need to pull back. It's just been a remarkable run and we're sort of pushing up now against the record highs from February, so for me, it would make sense for them to take a breather."
DAVID CHAO, GLOBAL MARKET STRATEGIST, ASIA PACIFIC, INVESCO, HONG KONG:
"The recent headlines that we've seen is that the US and China - they're ready to make a deal, I think from both sides, and that is a very good sign for markets as well as for policymakers in both countries. Because ultimately, cooler heads will prevail, and we think that the road has been laid for closer dialogue between the top leaders between the two countries.
"Today's news about the US and China striking a potential deal on things like rare earths or access to semiconductors or jet engine equipment, that is a very good indication that we have moved through peak tariff uncertainty."
REUTERS
Published :
Jun 11, 2025 20:28
Updated :
Jun 11, 2025 20:28
Treasury Secretary Scott Bessent and Chinese vice premier He Lifeng meet in London. Photo : United States Treasury/Handout
U.S. and Chinese officials said they had agreed on a framework to put their trade truce back on track and remove China's export restrictions on rare earths while offering little sign of a durable resolution to longstanding trade differences.
China's Vice Commerce Minister Li Chenggang said the two teams had agreed on implementing their Geneva consensus and would take the agreed framework back to their leaders.
A White House official said the deal allows the U.S. to charge a 55% tariff on imported Chinese goods. This includes a 10% baseline "reciprocal" tariff, a 20% tariff for fentanyl trafficking and a 25% tariff reflecting pre-existing tariffs. China would charge a 10% tariff on U.S. imports.
MARKET REACTION:
Equity markets and the dollar were muted, with S&P 500 up 0.1%, while awaiting more detail of what was decided and whether it would stick.
QUOTES:
GENE GOLDMAN, CHIEF INVESTMENT OFFICER AT CETERA INVESTMENT MANAGEMENT, EL SEGUNDO, CA:
"Equity markets breathed a sigh of relief on news of a potential US-China trade deal. However, I would take this news with a bit of caution. While President Trump indicated favorable news that imports on Chinese imports would rise from 30% to 55% and Chinese rare-earth exports may resume, there is little news on what China gets in return. I doubt this is a one-way deal and hence the market caution seen overnight."
SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH, ALLENTOWN, PENNSYLVANIA:
“We’ve seen a relatively muted reaction to the news of a ‘deal’ with China, and to me that signals indifference. It says, OK, you have agreed to continue talking and set up a framework for future talks, but nothing all that significant has really been resolved. The market is saying, tell me something worth knowing about. And we all know that if we don’t have a comprehensive solution, it’s not going to be good. It would mean we have to purchase our 30 dolls for Christmas somewhere else, which will be much more expensive.
"This is just my own reading of this, but in the face of better-than-expected inflation numbers today, the market is struggling to hold onto its gains and I can only think that it’s that people needed to see more from the China talks. Perhaps investors sold on strength, out of the opinion that we’re overbought at this stage.”
OLIVER PURSCHE, SENIOR VICE PRESIDENT, ADVISOR, WEALTHSPIRE ADVISORS, WESTPORT, CONNECTICUT:
"It's a done deal according to President Trump, but we haven't seen any details, which is why I think the market is not reacting to it yet. As with just about everything, the devil is in the details... The other big piece of news is the U.S. and China seem to have a framework for further discussions, and that contradicts a statement of, it's a done deal.
"This morning's inflation report, while softer than expected, was largely due to falling energy prices and an indication of a further slowdown in U.S. economic activity."
ADAM BUTTON, CHIEF CURRENCY ANALYST, FOREXLIVE, TORONTO:
“Obviously, it's good news that China and the U.S. have reached some sort of agreement, and Trump has certainly tried to spin it positively. But it's not clear what path the U.S. and China are on and what they're trying to achieve. Trump hinted at this, saying he wants to expand China trade. In some ways, the U.S.-China talks have created more questions than answers. Is this tariff rate going to stick? And what exactly are the U.S. and China working towards?
“The ultimate takeaway on China is that things aren't getting worse. So, that's good. We probably built in some expectations of maybe material progress.”
JOHN PRAVEEN, MANAGING DIRECTOR, PALEO LEON, PRINCETON, NJ:
"The worst-case scenario is probably behind us. There's a little bit of face saving for both sides. From the U.S. point of view the rare earth thing was a big deal. They got an agreement. The question is whether it will be implemented. The fact they have some kind of agreement is probably at least a relief for the market."
"Both sides got a little bit of what they wanted. The fact that things that things are de-escalating is the important point. It's probably a relief for the markets."
"We'll have to wait and see if they will further scale it down. When the dust settles it will probably come down a little bit further because this level of tariff will probably cause inflationary pain for the consumer."
"When Trump and Xi meet they'll probably scale it down further. You need to save something for that meeting."
PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK:
"That's good news, obviously. We're still waiting for the full details, and it has to be ratified by both Trump and Xi, but I think that's a foregone conclusion that it will be. That's good news and relieves worries... Of course, the real thing is there is an agreement that would allow perhaps China to resume its exports of rare earth products, which I think was key to this."
ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT:
"It's at least a positive headline. The exchange of technology for rare earth materials is a positive and it's encouraging that the two countries are trying to work together. We'll see if Xi will approve it and we'll see what Trump does."
WASIF LATIF, PRESIDENT AND CHIEF INVESTMENT OFFICER, SARMAYA PARTNERS, PRINCETON, NEW JERSEY"
“It's getting clearer that the initial round of big, high levels of tariffs were negotiation tactics. And when you finally saw what were the chips that each side had on the table - China with its rare earth and then the US with different kind of trade related chips, including the impact to any students at universities here - you got some clarity on them both wanting to come to an agreement of sorts. Now that's good news for the market.
"However, the market had already anticipated that because that the rally that we saw from the tariff lows was already beginning to bake in a better outcome than what had initially been being put out. So the proof of that was that when the agreement was announced late last night to early this morning, you saw the futures actually begin to decline. So it felt like a little bit of sell-the-news type of situation as opposed to a real market impact because a lot of the anticipated benefits had been backed in.
"The incremental news that’s moving markets right now is the CPI print. On the longer term, the trade impact from tariffs will be interesting to see. Many folks are saying tariffs are inflationary but then other folks are saying it will be deflationary. But I think the truth will be somewhere in between.”
CHRIS WESTON, HEAD OF RESEARCH, PEPPERSTONE, MELBOURNE:
"The devil will be in the details but the lack of reaction suggests this outcome fully expected.
"While clearly a positive outcome, the lack of reaction in S&P500 futures, and the incremental moves seen in CNH or AUD, suggests achieving the framework on the Geneva agreement was fully expected – the details matter, especially around the degree of rare earths bound for the US, and the subsequent freedom for US produced chips to head East, but for now as long as the headlines of talks between the two parties remain constructive, risk assets should remain supported."
LIN GENGWEI, CO-FOUNDER AND CEO, RAIN TREE PARTNERS, SINGAPORE:
"Both sides have the pressure, and willingness to reach an agreement. This is temporary achievement in talks but will not alter the pattern of perennial Sino-U.S. rivalry.
"The U.S. will not completely remove restrictions on chip exports to China, but may relax the curbs in response to pressure from both Beijing and the domestic semiconductor sector."
MARK DONG, CO-FOUNDER OF MINORITY ASSET MANAGEMENT, HONG KONG:
"This is positive news to the market. At least now there's a bottom line that neither side is willing to cross.
"Going forward, both sides will move toward reducing the trade imbalance."
ZENG WENKAI, CHIEF INVESTMENT OFFICER, SHENGQI ASSET MANAGEMENT, HONG KONG:
"The market likely anticipated this — Trump is just TACO (Trump always chickens out)."
"Look at how countries are negotiating with the U.S. these days; it’s no longer like how Vietnam approached things early on. Japan and South Korea are taking a tougher stance. People have realised that kneeling gets you nowhere — in fact, it only invites more bullying."
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:
"Markets will likely welcome the shift in tone from confrontation to coordination. But with no further meetings scheduled, we’re not out of the woods yet. The next step depends on Trump and Xi endorsing and enforcing the proposed framework.
"It’s important not to mistake this tactical de-escalation for a full reversal of strategic decoupling. The underlying competition around technology, supply chains, and national security remains very much intact. New issues can always emerge, and the real test will be how far this "new old deal" is implemented."
TAN XIAOYUN, FOUNDING PARTNER OF ZONSO CAPITAL, GUANGDONG:
"Talks will continue under the agreed framework, and I believe the U.S. will give in more than China to reach a deal."
"Under the current circumstances, the U.S. side faces more pressing challenges, while the Chinese side has more breathing space. China was defensive, but has turned offensive, leveraging on rare earth and market access. This marks a rebalancing in strength and clout."
MICHAEL MCCARTHY, CHIEF EXECUTIVE OFFICER, MOOMOO AUSTRALIA, SYDNEY:
"I'll be watching to see how bonds trade today on the back of this. The currency markets are taking it in stride, and given the equity markets are back to all-time highs or thereabouts, it does appear that this was very much anticipated.
"For weeks, there have been expectations of the deal. The delivery of it will likely be a market positive, with a weakening dollar and stronger equities, but it’s not a step change."
CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:
"I think in this environment... any hints on progress on a potential trade agreement will be positive for markets.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement. That sort of comprehensive deal usually takes years to be reached, so I'm skeptical that a framework reached at the meeting in London will be comprehensive. Tensions might be de-escalated for now, but they will certainly escalate again in coming months."
RAY ATTRILL, HEAD OF FX STRATEGY AT NATIONAL AUSTRALIA BANK, SYDNEY:
"It's way too early to say that we know we're in the midst of establishing a cast iron, new US-China trade agreement. The whole year has been littered with positive omens about reaching agreements and then we haven't really seen substantial progress or we've seen backsliding on things that were seemingly agreed so.
"Our view is still that whatever does get agreed in the coming weeks and months, the baseline view is that we're going to end up with a global tariff situation which is far worse than existed prior to Trump's ascent to the presidency so we're still going to have a tariff environment we believe will be detrimental as far as global growth is concerned."
TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY:
"If we keep the terms of the Geneva Agreement, we're looking at US tariffs on Chinese goods staying at 30% for a period of time and Chinese tariffs on US goods at 10%. So that's down from 145% and 125% respectively. That would be fantastic.
"Now that for me was probably the market consensus ... and now people just trying to work out whether they're gonna buy or sell the US dollar and that's I think reflecting a bit of that indecision.
"That's why U.S. equity markets are holding at this point of time. I still feel like they're overcooked and they need to pull back. It's just been a remarkable run and we're sort of pushing up now against the record highs from February, so for me, it would make sense for them to take a breather."
DAVID CHAO, GLOBAL MARKET STRATEGIST, ASIA PACIFIC, INVESCO, HONG KONG:
"The recent headlines that we've seen is that the US and China - they're ready to make a deal, I think from both sides, and that is a very good sign for markets as well as for policymakers in both countries. Because ultimately, cooler heads will prevail, and we think that the road has been laid for closer dialogue between the top leaders between the two countries.
"Today's news about the US and China striking a potential deal on things like rare earths or access to semiconductors or jet engine equipment, that is a very good indication that we have moved through peak tariff uncertainty."
