On November 5, 2025, President Trump announced an expanded trade deal with China that marked a significant de-escalation in the tariff conflict that had dominated his second term. The agreement reduced fentanyl-related tariffs, suspended rare earth export controls, and committed China to substantial agricultural purchases through 2028.

Key Terms of the Agreement

The November deal built upon the May 2025 framework that had initially paused the most aggressive tariff escalation. Under the new terms, the United States agreed to lower tariffs on Chinese imports imposed to curb fentanyl flows by removing 10 percentage points from the cumulative rate, effective November 10, 2025.

Perhaps more significantly, the US agreed to maintain its suspension of heightened reciprocal tariffs on Chinese imports until November 10, 2026, providing businesses with a full year of relative stability. The baseline 10% reciprocal tariff remains in effect during this suspension period.

China's Concessions

China made several significant concessions that addressed long-standing US concerns about supply chain security and market access. Most notably, China agreed to suspend the global implementation of expansive export controls on rare earths that it had announced on October 9, 2025.

Under the deal, China will issue general licenses for exports of rare earths, gallium, germanium, antimony, and graphite for the benefit of US end users and their suppliers worldwide. This effectively removes controls China had imposed since 2023, which had raised alarm bells across the US technology and defense sectors.

Addressing the Fentanyl Crisis

A central component of the agreement addresses the fentanyl crisis that Trump had cited as justification for his initial tariffs in February 2025. China agreed to take "significant measures" to end the flow of fentanyl to the United States, specifically committing to:

• Stop the shipment of certain designated chemicals to North America
• Strictly control exports of certain other precursor chemicals to all global destinations
• Suspend retaliatory tariffs on US agricultural products including chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, and dairy

Semiconductor and Technology Provisions

China also agreed to terminate various investigations targeting US companies in the semiconductor supply chain, including antitrust, anti-monopoly, and anti-dumping investigations. Additionally, China committed to take measures ensuring the resumption of trade from Nexperia's facilities in China, allowing production of critical legacy chips to flow globally.

These concessions came after months of escalating tech tensions that had seen China's DeepSeek emergence as a major AI competitor and growing US debates about whether American capital should fund Chinese technological breakthroughs.

Market Implications

The November deal provides crucial breathing room for businesses that had been whipsawed by tariff uncertainty throughout 2025. With reciprocal tariff suspension extended to November 2026, companies now have a clearer planning horizon for supply chain decisions.

However, analysts caution that the deal represents "tactical stabilization" rather than a fundamental resolution of US-China trade tensions. The baseline 10% tariff remains in effect, and Section 301 tariffs from the first Trump administration continue to apply to hundreds of billions of dollars in Chinese goods.

Looking Ahead to 2026

The agreement comes ahead of a planned April 2026 state visit by Trump to Beijing, which could provide an opportunity for further stabilization. However, Beijing remembers that Trump's 2017 state visit did not prevent the 2018 trade confrontation, and significant structural issues remain unresolved.

With the Supreme Court's decision on IEEPA tariff authority expected in 2026, the legal foundation of Trump's tariff strategy may face scrutiny. For now, businesses are advised to take advantage of the suspension period while preparing for potential future volatility.