US-China Trade Deal: Beijing, Washington Signal Trade Harmony, Yet Uncertainty

Beijing echoed Washington’s calls to uphold the agreement. Vice Premier He Lefeng reportedly said that both countries should honor trade commitments and maintain dialogue to ensure progress toward long-term stability.
Economists Question the Deal’s Credibility
Global markets initially welcomed the diplomatic tone and the prospect of continued discussions between the two leaders. However, economists’ reactions to Trump’s remarks were less optimistic.
Peter Schiff, Chief Economist and Global Strategist at Euro Pacific Asset Management, remarked:
“With regard to his deal with China, Trump is boasting that ‘we are getting a total of 55 per cent tariffs, China is getting 10 per cent.’ But ‘we are getting’ really means ‘we are paying.’ This tax hike means Chinese goods will be 55% more expensive for Americans who buy them.”
More expensive goods from China and cheaper goods from the US may tilt the supply-demand balance in favor of US goods. However, the reality is that tariffs on Chinese goods could drive US inflation higher, impacting Fed rate cut bets and potentially the US economy.
Brian Tycangco, editor at Stansberry Research, highlighted the one-sided nature of the agreement, stating:
“Little coming out of the US side makes sense. China agreeing to 55% tariffs and giving into US rare earth demands without really getting much. They (China) had the upper hand going into the trade talks. These terms don’t make sense. Now Lutnick is saying there are no texts to the deal, that negotiations will be a long process, and Bessent with his statement that China won’t be allowed to export its way back to prosperity. I mean, can we at least get through 24 hours first before self-destructing here?”
Tycangco also noted Beijing’s muted response, suggesting the agreement remains preliminary and that longer negotiations are likely.
Trade Deal Euphoria Fades as Markets Dip
On Thursday, June 12, Hong Kong and Mainland China markets failed to extend gains from the previous day. The CSI 300 and the Shanghai Composite fell 0.37% and 0.21% in early trading, while the Hang Seng Index dropped 0.65%.
Despite the agreement from two days of talks, the lack of substance left investors in limbo. US-China trade talks appear set to continue fueling market sentiment.
This article was originally published by a www.fxempire.com
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