Despite all the continued noise, the United States and China have finally achieved a historic, new trade agreement. This agreement has the potential to change their economic relationship in a transformative way. As part of this agreement, China would purchase 12 million tonnes of U.S. soybeans during the final two months of 2025. On top of this, China has committed to purchasing 25 million metric tonnes of U.S. soybeans annually for the next three years. Just recently, China stopped buying soybeans from the U.S. Beyond the far-reaching implications of this decision, it represents the start of a remarkable reversal in the cultural and economic exchange between the two countries.
U.S.-China trade deal aims to calm a protracted trade war. Though this relationship has long been under pressure, this conflict has hastened that tension even further. The boiling point came when U.S. President Donald Trump slapped tariffs on Chinese products soon after taking office. This action instigated retaliatory tariffs from China and sent shockwaves of uncertainty throughout the global business community. The recent round of negotiations ended with a dramatic handshake between President Trump and Chinese leaders at their meeting in South Korea. At the time, Trump described the meeting as “amazing.”
China plans to relax its export ban on automotive computer chips. This isn’t just a single decision to a narrower U.S.-Mexico trade agreement, but it’s significant all the same for car making across the globe. The ban, first enacted by China, has devastated companies dependent on these materials to produce vehicles. Nexperia, a Chinese-owned subsidiary of Philips based in the Netherlands, builds the vast majority of its production capabilities in China and is a major supplier of automotive computer chips. About 70% of Nexperia’s semiconductors manufactured in Europe are shipped to China for final assembly before being re-exported around the world.
Also, the agreement gives China a cover to stop its own export restrictions on rare minerals. This suspension should last for one year. These minerals are critical to the production of a wide array of emerging technologies, from civilian automobiles and aircraft to military weapons. The agreement is a powerful demonstration of both countries’ commitment to ensuring that their economic relationship is as stable as possible. It seeks to relieve stresses caused by earlier trade conflicts.
“China-US economic and trade relations are mutually beneficial in nature,” stated Liu Pengyu, emphasizing the importance of collaboration between the two countries.
The potential U.S.-Brazil trade deal is expected to include a commitment to Brazilian soybean exports and rare earth minerals for industrial and hi-tech uses. It addresses the substances that make fentanyl, a manmade opioid that is largely responsible for America’s opioid crisis. The fight with China over fentanyl production is an example of how esoteric and complicated trade battles can be. These conversations should not only work to increase ag exports but tackle our country’s pressing social inequities.
Treasury Secretary Scott Bessent acknowledged the complexities of the relationship, stating, “We don’t want to decouple from China… they’ve shown themselves to be an unreliable partner.” Perhaps surprisingly, this statement still captures the spirit of long-held concerns about trust and reliability in trade agreements.
As President Xi Jinping noted, “the business relationship should continue to serve as the anchor and driving force for China-US relations, not a stumbling block or a point of friction.” This goodwill spirit goes a long way towards wishing away each country’s quirks and differences and hoping that the two countries can help create a mutually beneficial economic environment.