Partial U.S.–China Trade Truce Sparks Market Rally, Leaves Key Risks

Published Nov 12, 2025

On November 5, 2025, following a Trump–Xi meeting at APEC in South Korea, China announced it will suspend a 24% retaliatory tariff on U.S. goods effective November 10, retaining a 10% "Liberation Day" levy and a 13% duty on soybeans; it will also remove export controls on 15 U.S. entities and suspend restrictions on 16 others for one year. The U.S. agreed to cut steep tariffs on Chinese imports from 145% to about 30% over three months, and U.S. officials said China committed to buying 12 million metric tons of soybeans by end‐2025 and 25 million annually through 2026–2028 (unverified by Beijing). Markets rallied on November 5. The truce should ease input costs, boost some export volumes and supply‐chain stability, but many measures are time‐bound and key issues remain unresolved, with enforcement and further negotiations to be watched into 2026.

#china #global-economy #inflation #tariffs #trade

Key Tariff Changes and U.S.-China Trade Commitments Through 2028

  • U.S. tariff rate on Chinese imports — 30% (next 3 months; -115 pp vs prior 145%; U.S. tariffs on Chinese goods)
  • China additional retaliatory tariff on U.S. goods — 0% (Nov 10, 2025–Nov 9, 2026; -24 pp vs prior 24%; China on U.S. goods)
  • China "Liberation Day" tariff on U.S. goods — 10% (from Nov 10, 2025; unchanged; China on U.S. goods)
  • Import duty on U.S. soybeans (China) — 13% (as of Nov 2025; unchanged; China on U.S. soybeans)
  • U.S. soybeans purchase commitment by China — 25 million metric tons/year (2026–2028; new; White House claim, unverified)

Navigating Trade Truce Risks: Tariffs, Agriculture, and Regulatory Challenges Ahead

  • Bold Time-bound truce and tariff snapback risk: The U.S. cuts tariffs on Chinese goods from 145% to ~30% only for three months, while China’s 24% retaliatory levy is suspended for one year from 2025-11-10 and a 10% tariff remains; core tensions are unresolved and enforcement drifts into 2026—creating planning and pricing risk for global supply chains. Mitigation/opportunity: front-load shipments, lock multi-quarter contracts, and diversify suppliers; manufacturers, retailers, and logistics firms can capture margin and service gains.
  • Bold Agricultural exposure—soybeans still uncompetitive (Known unknown): A 13% soybean duty persists and China’s pledges to buy 12 MMT by end-2025 and 25 MMT annually in 2026–2028 are unverified; tariff cuts on other U.S. farm goods are “up to 15%” with unclear product scope—leaving U.S. farmers exposed to Brazilian competition and demand volatility. Mitigation/opportunity: use hedging and flexible sales channels, lobby for clarified tariff codes, and pivot crop mix; commodity traders and risk managers can monetize volatility while producers secure alternative markets.
  • Bold Regulatory/export-control whiplash and compliance risk: China removes controls for 15 U.S. entities and suspends measures for 16 for one year, but some curbs remain and the “unreliable entity” rollbacks are partial—raising odds of sudden license expirations or reinstatements that disrupt operations and create legal exposure. Mitigation/opportunity: invest in compliance tooling, dual-sourcing, and contingency licensing; compliance vendors, legal counsel, and diversified suppliers stand to benefit.

Key 2025-2026 Milestones Shaping US-China Trade and Economic Outlook

Period | Milestone | Impact --- | --- | --- December 2025 (TBD) | Verify China’s purchase of 12 million metric tons U.S. soybeans by year-end. | Confirms truce enforcement; supports U.S. farmers or exposes compliance gaps. February 2026 (TBD) | Completion of U.S. tariff cuts to about 30% from 145%. | Eases import costs; may temper inflation for consumer goods and inputs. November 10, 2026 | One-year suspension of restrictions for 16 U.S. entities reaches review/expiry date. | Possible reimposition of controls; renews regulatory risk for affected U.S. firms.

November Thaw: Truce Brings Predictability, Not Peace, to Global Trade Tensions

Depending on where you sit, the November thaw is either a stabilizing reset or a tactical timeout. Supporters point to a real cooling: global equities rallied on November 5 as the U.S. moved to cut tariffs on Chinese goods from 145% to about 30% over three months, while China suspended its 24% retaliatory levy and reduced taxes on U.S. imports to 10%, alongside rollbacks of some measures tied to its “unreliable entity” list. Skeptics counter that the scaffolding of conflict remains: a 10% “Liberation Day” tariff still applies, soybean imports face a 13% duty that keeps U.S. farmers on the back foot, and Beijing has not independently verified the White House’s touted purchase commitments. The carve‐outs are hazy—ag tariffs “up to 15%” with few specifics—and several export curbs persist, with much of the détente time‐boxed to one year. Markets may be cheering the headlines, but we’ve cut the rates, not the rivalry.

The counterintuitive takeaway is that this partial, reversible deal could move the macro needle more than a sweeping accord—because it buys predictability, not peace. By easing select input costs and de‐escalating the trajectory, the truce can buoy manufacturers’ margins and temper price pressures even as analysts still expect inflation to stay elevated in 2025. What to watch next: whether soybean levies actually fall or U.S. farmers remain sidelined; which agricultural tariff codes truly benefit; and how one‐year suspensions and enforcement play out into 2026 as unresolved issues—from export controls to sanctions—return to the table. The pause is the policy; the clock is the risk.