Thread by @Moseschuks18

The U.S. and China just stepped back from the trade-war ledge again, but this time with a framework that might actually hold. Over the weekend, Treasury’s Scott Bessent and USTR’s Jamieson Greer met their Chinese counterparts,

hammering out what both sides called a “preliminary consensus.” Translation: Washington is holding off on 100% tariffs, Beijing is easing its chokehold on rare-earth exports, and both are pretending this was cooperation, not coercion. It’s not a signed deal,

but it’s a face-saving handshake before the Trump–Xi summit. Think of it as diplomacy by deadline, everyone gets to look strong on camera while keeping global supply chains from snapping.

This “trade truce 2.0” matters far beyond headlines.

A pause on tariffs means breathing room for manufacturers, semiconductors, and commodity traders who’ve been pricing in chaos. If China softens rare-earth restrictions, it could cool inflation pressure in high-tech sectors and ease the weaponization of supply chains.

It also signals that both economies are acknowledging reality, you can’t decouple when your balance sheets are tied together by trillions in trade flows. The U.S. flexed, China blinked, but only slightly. The game continues, just on a lower-risk board.

Here’s the takeaway: don’t confuse this for détente. This isn’t peace, it’s a time-out. The geopolitical chessboard still includes Taiwan, AI chip controls, and the slow motion “Cold War” over tech dominance. But the market reads what’s in front of it, not beneath it,

and right now, it sees green. Expect equities, EM currencies, and industrial metals to breathe easier. But if the handshake turns into another stalemate, the tariff gun comes right back out. Trade truce or trade trap, that’s the bet.

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