Both sides looked to have blinked but I think the US side blinked harder. In addition to the significant reduction of tariffs rates on PRC goods imported into the US for ninety days, the establishment of a dialogue mechanism with designated leadership (Bessent and Greer on the US side, He Lifeng on the Chinese side) is something that will make PRC policymakers very happy. They love dialogue mechanisms.In addition to the tariff cuts China also agreed that it would “adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025”. That sounds like it means any export controls on rare earths and rare-earth magnets announced since April 2nd. That would be a meaningful concession from the PRC side, and we should know soon if that is what that language means as US firms who need those goods rush to make purchases. The Chinese side has justification for saying things like “China’s previous resolute countermeasures and fighting stance have been very effective; the retaliatory measures did indeed have a significant impact on the U.S., and only then did the U.S. government reduce the tariffs to the level of the base tariff following the talks”. However, there is no doubt a sense of relief that the effective US trade embargo is pushed out at least ninety days while the two sides engage in dialogue.
Love the paper tiger pic….