US–China trade tensions cool as framework deal takes shape - tariffs paused, soybeans back, TikTok “done”

Washington and Beijing have hit pause on the tariff tug-of-war, sketching out a framework deal ahead of Trump and Xi’s meeting this week in South Korea. After months of escalation threats and political theatre, both sides have finally stepped back from the ledge - not out of love, but out of strategic self-preservation.

According to US Treasury Secretary Scott Bessent, the deal-in-principle includes three major concessions:

1. A deferral of China’s rare earth export controls

2. A “final” agreement on TikTok’s US operations

3. China resuming large-scale soybean purchases from the US

The key headline for supply chains: the threatened 100% tariff hike on Chinese goods is now unlikely to take effect. In other words, escalation has been paused, not erased, but the market has been thrown a lifeline.

Rare earths: the real leverage point

Forget TikTok’s headlines... the true economic chokehold is minerals.

China currently processes around 90% of the world’s rare earths, which are critical to everything from solar panels and EVs to defence tech and consumer electronics.

Beijing had moved toward tightening export controls in retaliation for Trump’s threats. That sent a shockwave through US manufacturing, especially downstream tech producers. Under the new framework, China will delay those controls for 12 months, effectively re-opening the mineral tap - at least temporarily.

This is the clearest sign that both sides are avoiding a “supply chain weaponisation spiral.”

Agriculture trade thaw: soybeans back on the table

China is the world’s biggest soybean buyer. When the trade war heated up, orders from the US were halted, smashing American farmers and becoming a political pressure valve.

Bessent strongly hinted that the ban is being lifted as part of the deal - a major diplomatic concession from Beijing and a face-saving domestic win for Trump.

TikTok resolution — geopolitics wrapped in an algorithm

A “final deal” on TikTok’s US arm is reportedly ready for the two leaders to sign off.

The model:

• US companies control the algorithm

• The board majority shifts to American oversight

• TikTok avoids a shutdownTrump avoids alienating the enormous youth voting bloc he leaned on in 2024

The subtext? Tech is not just cultural - it is strategic IP.

The Impact

This breakthrough didn’t happen in isolation. Trump is on an Asia tour, signing framework deals with Malaysia, Thailand, Cambodia, and Vietnam - expanding US access to minerals and manufacturing beyond China.

Call it “de-risking in real time.”

Vietnam also inked major procurement with the US, including an $8bn Boeing jet purchase - a geopolitical olive branch wrapped in a trade invoice.

Our take

This isn’t a friendship... it’s a freeze-frame.

Beijing is delaying controls, not abandoning them. Washington is postponing tariffs, not cancelling them. The trade war hasn’t ended - it’s just been placed in a holding pattern while both sides reposition.

The big question is whether this is a stabilisation or merely a pre-election tactical pause before another round of strategic pressure.

For now, markets get breathing room. Supply chains get relief. But the risk hasn’t evaporated - it’s just wearing better packaging.

Sources: BBC, The Guardian, The Wall Street Journal