US-China trade deal brings market relief, but rivalry continues - deVere’s Green

Investing.com -- Markets are expected to rally following the announcement of a US-China trade agreement, though the fundamental conflict between the world’s two largest economies remains unresolved, according to deVere Group CEO Nigel Green.

The trade deal comes after President Donald Trump stated Wednesday that an agreement with China is "done," pending final approval from both countries’ leaders. The pact, reached after two days of high-level discussions in London, will give the US access to rare earth metals essential for its technology and clean energy industries, while allowing Chinese students to resume their studies at American universities.

"This is a headline-friendly development and markets will understandably welcome it. But beneath the surface, nothing fundamental has changed," Green said. "This isn’t a breakthrough, it’s a partial restoration of a fragile status quo."

Green noted that the agreement largely returns relations to the already-tense conditions that existed before early April. Tariff levels remain historically high on both sides, major export restrictions continue, and key sectors are unaddressed in the deal.

The US maintains its ban on selling advanced AI chips and semiconductor equipment to Chinese companies, citing national security concerns. China has not received significant concessions regarding automobile exports, nor has it permanently eased restrictions on outbound shipments of critical minerals.

"Beijing isn’t getting access to the US auto market, and Washington isn’t about to start selling its high-end AI technology. Neither side is treating the other all that differently than before this agreement," Green explained.

While the deal covers tactical issues like the Geneva consensus, rare earth supplies, and student mobility, it avoids core points of contention: technology control, supply chain independence, export restrictions, and geopolitical influence.

Green cautioned investors against complacency: "Yes, markets will breathe easier in the short term. But the rivalry — the real contest for control of 21st-century economic power — continues unabated. This deal is more of a market management tool than a durable solution."

The deVere Group points to ongoing economic separation on multiple fronts. The US continues to focus on reshoring critical industries including EV batteries, semiconductors, and AI systems. Meanwhile, China is accelerating domestic production alternatives, financial insulation, and regional influence through Belt and Road initiatives and digital currency expansion.

"Two economic systems are forming," Green said. "The US and its allies on one track, China and its partners on another. Investors need to understand the gravity of this shift. Today’s agreement doesn’t stop that — it merely papers over it."

For investors, the outlook is mixed. Short-term market sentiment will likely improve, especially for equities in global trade flows, semiconductors, logistics, and consumer electronics. However, deeper strategic risks persist as tariffs and restrictions remain in place, with national security considerations still driving trade policy.

Green advised clients to continue geographic diversification, build exposure to supply chain alternatives, and favor sectors that can withstand geopolitical tension.

"This is the world we’re in now: strategic competition, periodic truces, and selective cooperation. Investors who think globally and position accordingly will come out ahead," Green concluded.

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