Trade tensions between the United States and China appear to be easing, with US President Donald Trump announcing a tentative deal following talks in London. Trump stated on his social media platform Truth Social that the deal includes China agreeing to supply US companies with magnets and rare earth metals, while the US will walk back threats to revoke visas for Chinese students. However, the agreement is subject to final approval from President Xi Jinping and Trump himself.
Despite the announcement, analysts and markets have reacted cautiously. Business correspondent David Taylor noted that the limited nature of the deal underscores ongoing questions about whether the US tariff strategy can quickly yield a comprehensive trade agreement. White House Press Secretary Karoline Leavitt confirmed that Trump is reviewing the deal's details and indicated that the President liked what he heard so far.
The Australian share market reached an all-time intraday high on the news, reflecting optimism about reduced global trade friction. Currency markets, however, remain attentive to developments, with the US dollar weakening as part of Trump's broader policy agenda to boost US exports. Henry Jennings, senior portfolio manager at Marcus Today, commented that the dollar's decline aligns with Trump's goals of making US exports more competitive.
US Treasury Secretary Scott Bessent has suggested that the US may extend the existing 90-day tariff pause on some aggressive tariffs to allow continued trade talks with other countries. While the deal marks a step toward de-escalation, no tangible progress has been made beyond the May truce, which lowered but did not eliminate new tariffs. The Chinese president has yet to comment on the agreement.
