U.S-China : A Step Forward or Another Waiting Game?

Another step forward, or another stall dressed up in diplomatic PR?

After back-to-back days of high-level talks in London, U.S. and Chinese trade officials say they’ve agreed on a framework to implement the Geneva consensus. But let’s be real, until the signatures dry, us traders are still navigating fog.

U.S. Commerce Secretary Howard Lutnick and China’s Vice Minister of Commerce Li Chenggang both confirmed the news. The next move? Both sides head home to brief their respective bosses: Trump and Xi. That alone signals there’s still political red tape and unresolved friction.

1. Framework, Not Finality

The keyword is “framework.” This isn’t a signed deal, yet. Think of it as a handshake before the paperwork. Both sides claim alignment on how to roll out what was agreed to in Geneva: a 90-day suspension of April’s tariffs and partial rollback of earlier restrictions.
But let’s not pretend this guarantees smooth sailing. As Natixis economist Jianwei Xu noted, there are still unresolved details, and whether this turns into something “concrete” remains an open question.

2. Rare Earths at the Core

Rare earth minerals were a sticking point, and a trade-off. The U.S. expects China to lift recent restrictions on rare-earth exports as part of this framework. In return, Lutnick hinted that Washington could ease up on restrictions related to high-tech exports, including chipmaking software and jet engine components. This could mean, both sides are dangling what the other needs.

3. Leverage, Not Love

This isn’t a feel-good reunion. As Scott Kennedy from CSIS put it, “this deal is taped together by leverage, not shared values.” That’s important. The U.S. wants critical minerals. China wants less tech strangulation. But the relationship is brittle, more about power plays than partnership. Volatility risk remains high.

4. Beijing’s Silence Speaks Volumes

While the U.S. team held pressers and gave updates, China’s state media was quiet for over an hour post-announcement. When they did report, it was through a low-profile wire quoting Li, not Xi or other top brass. That lack of fanfare tells you Beijing might be keeping options open or isn’t ready to sell this at home just yet.

5. Markets Shrug, Then Wait

China’s CSI 300 nudged higher. U.S. equity futures ticked lower. Traders aren’t jumping in either direction yet, and rightly so. With Trump and Xi yet to formally approve the plan, the real price action comes after that decision. Until then, expect tight ranges and headline-driven spikes.

This framework might offer a roadmap, but it’s not the destination. If you’re trading AUD, CNH, or even equities tied to semiconductors or rare earths, stay cautious. The fundamentals are shifting fast, but confirmation will come from follow-through, not promises.

As always: price leads, politics lags.