The United States (US)-China trade ceasefire, effective November 10, 2025, has ushered in a period of controlled escalation driven by the dynamics of economic interdependence between the two superpowers. This agreement, signed between Donald J. Trump and Xi Jinping, provides for the one-year suspension of sanctions targeting China’s dominance in the maritime, logistics, and shipbuilding sectors as part of the Section 301 investigation and the temporary lifting of controls on China’s rare earth element (REE) exports.[i]
The agreement’s key parameters and asymmetric concessions include the following elements, according to a White House official memorandum dated November 5, 2025: The US has fully suspended Section 301 sanctions targeting China’s maritime, logistics, and shipbuilding sectors, including port usage fees and service restrictions, from November 10, 2025, to November 10, 2026.[ii][iii]
China suspended comprehensive REE export controls, announced on October 9, 2025, for the same period, including heavy rare earths such as neodymium, dysprosium, and terbium. It also granted export licenses to US users for gallium, germanium, antimony, and graphite. This represents the de facto lifting of restrictions China implemented in April 2025 and October 2022.[iv] Tariffs on fentanyl precursor chemicals were reduced from 20% to 10%, and certain Section 301 exemptions were extended until November 10, 2026. This regulation can be considered a variant of the tit-for-tat strategy within the framework of realist international relations theory.
The basic architecture of this agreement can be read as a 21st-century geoeconomic version of the classic tit-for-tat strategy of realist international relations theory. Both actors temporarily neutralize their opponent’s strategic chokepoint without completely eliminating it, thus both halting short-term economic losses and maintaining their long-term momentum.[v] The US temporarily removed the threat of cutting off China’s logistics by completely suspending Section 301 port fees, which target China’s 21% share of global container shipping, from November 10, 2025, to November 10, 2026. In return, China, the power that controls 89% of global rare earth refining capacity and 99% of heavy rare earths, has committed to decommissioning this strategic weapon, which could affect more than 4,000 military-technological components ranging from F-35 magnets to hypersonic missiles, for the same period.
REEs are essential components of a wide range of dual-use technologies, from the magnet systems of the F-35 fighter jet to hypersonic missiles, wind turbines to electric vehicle batteries. China controls 89% of global refining capacity and 99% of heavy rare earths. The restrictions, which took effect in October 2025, have led to price increases of up to 300%, according to Pentagon reports. This trade ceasefire has temporarily eliminated this strategic pressure.[vi][vii]
Meanwhile, Section 301 port fees have directly impacted China’s 21% share of global container shipping (including COSCO). The trade ceasefire has temporarily suspended the mutually beneficial economic destruction scenario, but a gray area remains regarding military-grade samarium-cobalt magnets.[viii]
For Xi Jinping, this ceasefire represents a strategic window to boost growth, which fell to 4.7% in the third quarter of 2025, to above 5% in 2026. China’s commitment to purchase 25 million tons of US soybeans annually for the 2026-2028 period is a geoeconomic move that both strengthens the country’s food security and appeases Trump’s Midwestern American base.[ix]
From a liberal institutionalist perspective, this agreement can be considered a bilateral victory outside the World Trade Organization (WTO). The fragility of global supply chains, which increased by 15% by 2025, necessitated a manageable trade strategy in a climate where multilateral mechanisms were paralyzed.[x] According to the White House’s official statement on November 5, 2025, Trump’s April 2026 visit to China would be a critical turning point. With Xi Jinping’s visit to the US, the one-year ceasefire would be routinely extended, and an expanded version of the Phase One agreement (Phase One 2.0) would enter into force.
The agreement temporarily stabilizes the 15% increase in vulnerability experienced by global supply chains through 2025. The US has completely suspended port fees and service restrictions targeting China’s 21% share of global container shipping for the period November 10, 2025–2026. This action reduces logistics costs for American importers by 6.2% and alleviates inflationary pressure by 0.4 percentage points. On the Chinese side, the removal of REE export controls, particularly the general export license for gallium, germanium, and graphite, eliminates $2.8 billion in additional annual costs for the US defense industry.[xi]
China’s commitment to purchase 25 million tons of US soybeans annually from 2026 to 2028 targets both the country’s food security strategy and Trump’s Midwestern voter base. According to the IMF’s November 2025 projection, this ceasefire could boost China’s economic growth from 4.7% to 5.3% in 2026. However, the additional 10% tariff reduction on fentanyl precursor chemicals does not fully address domestic political demands to address the opioid crisis, and the asymmetric structure appears to persist.[xii]
From a realist paradigm perspective, this ceasefire represents an operational example of the escalation concept. Both actors temporarily loosen their opponent’s strategic chokepoints. While the US neutralizes China’s Section 301 mechanism, which threatens the Strait of Malacca-logistics axis, China maintains its strategic weapon, which holds 99% of global heavy REE capacity. This situation represents the controlled management of structural stress identified in the Thucydides Trap hypothesis. The Trump-Xi summit scheduled for April 2026 at the White House is marked as the starting point for Phase One 2.0 negotiations; however, the gray area surrounding dual-use items like samarium-cobalt magnets still leaves the deterrence balance unclear.[xiii]
Ultimately, the ceasefire of November 10, 2025, represents a fragile balancing act that simultaneously binds and distances the two giants in the third phase of the hegemonic transition. It is neither the triumph of liberal win-win cooperation nor the inevitable end of the realist Thucydides Trap; Rather, it is a controlled reconstruction of geoeconomic interdependence.
[i] “Fact Sheet: President Donald J. Trump Strikes Deal on Economic and Trade Relations with China”, The White House, https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-strikes-deal-on-economic-and-trade-relations-with-china/, (Access Date: 10.11.2025).
[ii] Ibid.
[iii] “Request for Comments on Suspending Section 301 Action for One Year: China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance”, Federal Register, https://www.federalregister.gov/documents/2025/11/10/2025-19839/request-for-comments-on-suspending-section-301-action-for-one-year-chinas-targeting-of-the-maritime, (Access Date: 10.11.2025).
[iv] “China Formalizes Rare Earth Curbs Suspension After Trade Truce, Bloomberg, https://www.bloomberg.com/news/articles/2025-11-07/china-formalizes-rare-earth-curbs-suspension-after-trade-truce, (Access Date: 10.11.2025).
[v] “Request for Comments on Suspending Section 301 Action for One Year: China’s Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance”, Federal Register, https://www.federalregister.gov/documents/2025/11/10/2025-19839/request-for-comments-on-suspending-section-301-action-for-one-year-chinas-targeting-of-the-maritime, (Access Date: 10.11.2025).
[vi] “Trump Hails ‘12’ Out of ‘10’ Meeting With Xi: What to Know About the U.S.-China ‘Deal’”, Time, https://time.com/7329777/trump-xi-meeting-korea-us-china-trade-deal-tariffs-takeaways/, (Access Date: 10.11.2025).
[vii] Pentagon Rare Earth Price Floor Reshapes Global Supply Chains”, Discovery Alert, https://discoveryalert.com.au/rare-earth-economics-strategic-shift-2025-5/, (Access Date: 10.11.2025).
[viii] “US and China Reach Trade Concessions Following Trump-Xi Meeting: Outcomes and Implications”, China Briefing, https://www.china-briefing.com/news/trump-xi-meeting-outcomes-and-implications/, (Access Date: 10.11.2025).
[ix] “US farmers caught in Trump-China trade war – who’ll buy the soybeans?”, The Guardian, https://www.theguardian.com/us-news/2025/oct/10/trump-china-trade-war-soybeans, (Access: 10.11.2025).
[x] “US-China Trade Truce Offers Fragile Calm Amidst Persistent Commodity Volatility”, Financial Content, https://markets.financialcontent.com/stocks/article/marketminute-2025-11-7-us-china-trade-truce-offers-fragile-calm-amidst-persistent-commodity-volatility#google_vignette, (Access Date: 10.11.2025).
[xi] “White House discloses details of China trade truce”, Politico, https://www.politico.com/news/2025/11/01/white-house-china-trade-truce-00632759, (Access: 10.11.2025).
[xii] “Fact Sheet: President Donald J. Trump Strikes Deal on Economic and Trade Relations with China”, The White House, https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-strikes-deal-on-economic-and-trade-relations-with-china/, (Access Date: 10.11.2025).
[xiii] “US and China Reach Trade Concessions Following Trump-Xi Meeting: Outcomes and Implications”, China Briefing, https://www.china-briefing.com/news/trump-xi-meeting-outcomes-and-implications/, (Access Date: 10.11.2025).
