Is the Trade War Between China and the US Ending? Impact on Crypto

After years of tariffs, trade restrictions, and global market turbulence, the United States and China have reached what experts call a “fragile truce.”

This recent development, signed between President Donald Trump and Chinese President Xi Jinping, aims to reduce trade tensions and restore cooperation in key sectors like rare earth exports and semiconductors.

But while the agreement sounds like progress, many analysts believe it’s more of a “ceasefire” than a permanent resolution. And for crypto markets, this uncertainty is still creating ripples.

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Key Takeaways

1. Trade Truce Announced: The US and China agreed to lift some tariffs and resume trade on critical materials like rare earths and semiconductors.

2. Market Still Fearful: Despite the truce, investor confidence remains fragile due to past market crashes and unpredictable politics.

3. Crypto Connection: The crypto market shows cautious optimism, with Bitcoin and Ethereum stabilizing but not yet rallying.

The US-China Truce: A Pause, Not an End

The agreement between the US and China aims to cool down a trade war that started years ago and has shaken industries worldwide.

According to experts, this truce involves lifting export restrictions on crucial materials like gallium, germanium, and rare earths, key components in tech manufacturing, defense, and clean energy.

China also agreed to increase its purchase of American goods such as soybeans while pausing tariffs on certain exports.

What’s Behind the Deal

China’s commitments include:

• Export Relief: Restoring supply chains by reopening rare earth exports to the US.

• Economic Cooperation: Reducing tariffs on specific US products.

• Policy Coordination: Promoting a less confrontational trade environment for 12 months.

For the United States, the truce is being celebrated as a diplomatic and economic win. But not everyone is convinced.

Former US National Security Council official Evan Medeiros described the relationship as “somewhere between a ceasefire and a truce,” noting that deeper tensions remain unresolved.

Both sides are keeping a close eye on compliance, knowing that one political misstep could easily reignite the conflict.

Read Also: US China Trade Talks Continue: Rare Earth Deals and Tax Discussion

Market Reaction: Relief with a Side of Doubt

At first glance, global markets responded positively. Stocks rose, commodity prices steadied, and the Australian and Chinese currencies gained strength.

But beneath that optimism lies skepticism. Investors have seen similar deals fall apart before, and they remember the volatility that comes with it.

The Memory of “Red October”

On October 11, 2025, when Donald Trump threatened 100% tariffs on China, global markets panicked, resulting in $19 billion wiped from the crypto market within 24 hours.

Bitcoin dropped sharply, Ether tumbled to $3,900, and the Fear & Greed Index sank to 33, signaling extreme fear.

Since then, recovery has been slow. Although the index has slightly improved to 37, caution still dominates.

Traders like Michael van de Poppe see this as a potential bottom, but many investors remain hesitant to jump back in. They’re waiting for proof that this truce is more than just political theater.

Why Confidence Remains Low

• Past Volatility: The crypto market has been scarred by sudden policy changes.

• Fragile Stability: Any reversal in trade talks could trigger new market shocks.

• Cautious Investors: After multiple crashes, traders prefer to wait rather than risk another sudden dip.

Read Also: Crypto Crash: $150B Wiped Out After China Strikes Back at the US!

The Impact on Crypto: Calm But Not Confident

You’d think a trade truce between two global powers would ignite a crypto rally, right? Not quite. While the deal provides short-term relief, crypto markets are still struggling to shake off fear and uncertainty.

How the Truce Affects Digital Assets

• Short-Term Stability: Bitcoin is holding around $110,000, and Ethereum near $3,900. Prices are steady but not soaring.

• Investor Sentiment: Many crypto traders interpret the truce as temporary, not transformative.

• Altcoin Stagnation: Alternative cryptocurrencies remain sluggish, reflecting broader market caution.

Crypto operates in a world where global politics and investor psychology intertwine. A calm geopolitical climate usually supports risk-taking, but when peace feels fragile, investors tend to stay defensive.

Traders are still nursing wounds from past downturns, waiting for sustained signals before committing to long-term positions.

Still, some analysts believe this could be a turning point if both countries honor their commitments.

Reduced trade friction may stabilize fiat currencies, leading to healthier liquidity and better conditions for crypto adoption. But for now, the mood remains careful, not euphoric.

Read Also: US vs China: How This Trade War Will Destroy the Global Economy

Conclusion

The US-China trade truce represents a welcome pause in a long and exhausting economic battle.

It brings hope for more stable supply chains, stronger investor confidence, and a calmer global market. Yet this peace feels more like a handshake than a long-term partnership.

Both nations remain strategic rivals with clashing interests, meaning another wave of tension could always be around the corner.

For crypto traders, this uncertainty is both a challenge and an opportunity. While markets remain cautious, stability creates space for smarter, safer investing.

That’s where platforms like Bitrue come in, offering secure trading environments, real-time analytics, and advanced tools to help users navigate global shifts with confidence.

Whether the trade truce lasts or not, Bitrue ensures your crypto journey stays informed and protected.

FAQ

What did the US and China agree to in the trade truce?

They agreed to lift certain tariffs, resume rare earth exports, and improve cooperation on key industries for at least one year.

Is the trade war officially over?

Not entirely. Experts describe it as a temporary pause rather than a complete resolution, as deep political and economic tensions remain.

How does this truce affect global markets?

The agreement has stabilized stock and commodity markets for now, but investors remain cautious about its long-term impact.

Why hasn’t crypto surged after the truce?

The crypto market still remembers past volatility and remains wary of political reversals, leading to cautious trading behavior.

What can investors do during this uncertain period?

Stay informed, diversify portfolios, and use reliable trading platforms like Bitrue to make secure and data-driven investment decisions.

Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.