China and the United States signed a memorandum of understanding, but Trump did not loudly publicize it as a major achievement, and China also handled it in a low-key manner.
In spring 2025, China and the United States signed a memorandum of understanding in Geneva, and the smoke of the trade war seemed to be dissipating. However, Trump did not publicly boast about his achievements as usual, and China also chose to respond with restraint. Why did this much-anticipated confrontation end so quietly? What considerations lie behind the agreement? What changes will the global economy face? Let's explore the truth behind this low-key agreement together.
Since 2018, the Sino-US trade war has continued to escalate, entering a critical phase by early 2025. During his second term, Trump continued his tough policies. In February 2025, he announced that he would impose a 25% tariff on $200 billion worth of Chinese goods, involving technology products and core manufacturing sectors, aiming to force China to compromise on technology transfer and market access. This was called "Tariff 2.0," directly leading to increased global supply chain costs. The New York and Shanghai stock markets fell by more than 5% within days. China responded quickly, announcing in March that it would restrict exports of 17 rare earth minerals to the US. These rare earths are key materials for smartphones, electric vehicles, and defense equipment. Some American technology companies were forced to reduce production due to material shortages, and economic pressure increased sharply.
The impact of the trade war was not limited to China and the United States. European and Japanese economies were deeply affected. The EU trade commissioner publicly called on both sides to resolve the issue through dialogue. The International Monetary Fund warned that the trade war could slow down global GDP growth. In the United States, agricultural and manufacturing associations pressured the White House to ease the dispute to reduce corporate costs. On the Chinese side, signs of slowing economic growth became apparent, and there was a tendency within the government to stabilize the situation through negotiations. In April 2025, China and the United States secretly agreed to hold high-level talks in Geneva, paving the way for subsequent agreements.
From May 10 to 11, 2025, the Chinese and U.S. delegations held closed-door negotiations at the United Nations Office in Geneva. U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He led their respective delegations. The U.S. proposed conditions to cancel most tariffs, while China requested the removal of restrictions on rare earth mineral exports and discussed issues related to student visas. After two days of intense discussions, both sides reached a preliminary consensus on the evening of May 11, agreeing to suspend some reciprocal tariffs for 90 days and laying the groundwork for the signing of the memorandum the next day.
On May 12, the memorandum of understanding was formally signed. The U.S. canceled 91% of the additional tariffs imposed on China, covering multiple areas such as electronic products and machinery; China reduced the retaliatory tariffs on U.S. agricultural products, lifted restrictions on rare earth exports, and committed to prioritizing the supply of rare earth minerals and magnets to the United States. This agreement did not arrange for a grand signing ceremony or press conference, and only a brief joint statement was released to the public, indicating that both sides intended to downplay the event's impact.
Trump responded to reporters' questions at the White House, saying only: "Things are moving in the right direction." He did not loudly promote his achievements as usual, and his tone was restrained. This low-key handling stemmed from multiple considerations: with the 2026 U.S. midterm elections approaching, Trump needed to balance the sentiments of domestic hardliners and avoid being accused of being weak toward China. At the same time, the agreement did not touch on core disagreements such as technology transfer, and high-profile promotion could have triggered more controversy.
On the Chinese side, a spokesperson for the Foreign Ministry said during a regular press briefing: "Both sides reached a consensus through equal negotiations and are willing to continue cooperation." This low-key response also reflected strategic considerations. The Chinese government hopes to maintain a strong international image and avoid being interpreted as yielding to the United States, while also seeking adjustment time for the domestic economy. Although both sides handled the matter discreetly, it left room for subsequent negotiations.
The specific content of the memorandum of understanding includes: the U.S. cancels 91% of the additional tariffs imposed on China, covering approximately $180 billion in goods; China reduces tariffs on U.S. agricultural products, suspends reciprocal tariffs for 90 days, and commits to resuming normal rare earth supplies. In addition, both sides reached a preliminary consensus on student entry issues, with the U.S. easing restrictions on Chinese student visas and China pledging to increase the number of academic exchange opportunities for U.S. students.
After the agreement took effect, the market reacted quickly. On May 13, the Nasdaq index rose by 2.3%, and the Shanghai Composite Index rebounded by 1.8%, showing investors' confidence in short-term stability. In late May, China intensified its enforcement of rare earth exports, and a smuggling case was seized at a port in Guangdong, indicating the determination to implement the commitment. In June, the U.S. Department of Commerce issued an order to officially cancel the tariffs involved in the agreement, and companies began adjusting their supply chains. By the end of June, Trump announced the agreement's implementation, but emphasized that it did not cover deeper issues such as technology transfer.
The signing of the memorandum of understanding provided a temporary respite for the global trade environment. Freight volumes at Asian and European ports gradually recovered, and international oil prices stabilized. However, this agreement was merely a temporary solution and did not address core disputes such as intellectual property rights and market access. While the U.S. manufacturing association welcomed the cancellation of tariffs, technology companies pointed out that the long-term stability of rare earth supply still remained questionable. China emphasized its continued participation in global trade and did not commit to further concessions in the technology sector.
At the beginning of July, both sides planned to hold a new round of negotiations in Singapore to try to resolve remaining differences. Global investors are closely watching, hoping for further clarity in trade relations. Although the memorandum of understanding eased some pressure, it did not completely change the Sino-U.S. power struggle, and future uncertainties still exist.
The quiet signing of this memorandum of understanding is both a result of mutual compromise and a setup for future struggles. Why did Trump abandon his usual loud style? Does China's low-key handling indicate a larger strategic layout? Can the short-term stability be sustained? These questions remain to be answered by time. In the second half of 2025, how will Sino-U.S. relations and the global economy evolve is worth continuous attention.
Original article: https://www.toutiao.com/article/1836504214896640/
Statement: The article represents the views of the author.