WASHINGTON — The United States and China announced a sweeping trade agreement Saturday that the White House called the most consequential bilateral economic deal in a generation, sending stock markets around the world to record highs and offering relief to industries that have operated under punishing tariffs for years. The S&P 500 futures surged 2.4 percent within minutes of the announcement, while the Shanghai Composite opened up 3.1 percent Monday morning. The deal had been rumored for weeks but its breadth surprised even veteran trade analysts.
Under the framework, the United States will reduce tariffs on Chinese manufactured goods from an average of 24 percent to 8 percent over a three-year period. China, in turn, will eliminate restrictions on American financial services firms seeking licenses to operate in the Chinese domestic market — a prize that Wall Street has sought since the 1990s. The deal also includes the most specific intellectual property protections ever agreed to by Beijing, including independent auditing mechanisms that US negotiators said were non-negotiable.
The path to agreement was long and repeatedly stalled. Talks broke down entirely in 2023 after a series of confrontations over Taiwan, semiconductor export controls, and mutual espionage accusations. The resumption of negotiations last year was itself considered a diplomatic achievement. Sources close to the talks say the breakthrough came when both sides agreed to separate the economic and security tracks entirely, allowing trade negotiators to work without waiting for broader geopolitical tensions to resolve.
American farmers, who have been among the hardest hit by years of retaliatory Chinese tariffs on agricultural exports, reacted with relief. The deal requires China to purchase a minimum of $80 billion in American agricultural products annually for five years. "This is the lifeline that rural America needed," said the president of the American Farm Bureau. Soybean and corn futures rose sharply in early trading, erasing months of losses.
Not all reactions were positive. Several US labor unions and manufacturing groups warned that reduced tariffs on Chinese goods could threaten American factory jobs that had gradually returned to domestic production during the high-tariff period. "We've been here before," said the president of the United Steelworkers. "Every time we open up to China, they flood our market and our workers pay the price." The White House countered that new domestic content requirements embedded in the deal provide protection for strategic industries including semiconductors and electric vehicles.
The agreement is expected to take effect after a 90-day congressional review period. Several lawmakers from both parties have already signaled their intention to scrutinize the intellectual property and enforcement provisions carefully. The deal does not require a formal Senate vote, having been structured as an executive agreement, but that classification is itself expected to draw legal challenges from legislators who argue it amounts to a treaty.