Assessing the U.S.-China Trade Truce and Its Impact on Agricultural and Tech Sectors

The U.S.-China trade truce announced in late 2025 marks a pivotal shift in the decade-long rivalry between the two economic giants. While the agreement is framed as a tactical pause rather than a strategic resolution, its immediate implications for U.S. agribusiness and semiconductor sectors are significant. By reducing tariffs, suspending retaliatory measures, and addressing rare earth supply chain constraints, the deal creates near-term opportunities for investors. However, the durability of these gains remains uncertain amid unresolved geopolitical tensions.

Agricultural Sector: Soybean Demand and Tariff Relief

China's commitment to purchase 12 million metric tons of U.S. soybeans in late 2025 and 25 million metric tons annually from 2026 to 2028 according to the White House has injected optimism into the agricultural sector. This surge in demand follows the suspension of Chinese retaliatory tariffs on U.S. agricultural goods, which had previously disrupted trade flows. For U.S. agribusinesses, the truce reduces export uncertainty and stabilizes revenue streams, particularly for soybean producers.

Investors are turning to ETFs like the Teucrium Soybean ETF (SOYB) and Teucrium Corn ETF (CORN) to capitalize on this trend. Technical analysis suggests SOYB is in a bullish phase, with its 50-day moving average crossing above the 200-day line and a positive MACD signal. Meanwhile, CORN has shown a "pivot bottom" pattern, with a 1.48% rise since November 24, 2025 and a projected trading range of $17.94–$18.66 over the next three months. Analysts recommend a cautious long position in SOYB and a buy stance on CORN, given its short-term momentum.

Semiconductor Sector: Rare Earths and Supply Chain Stability

The truce's impact on the semiconductor industry hinges on China's suspension of rare earth export controls. By issuing general licenses for the export of gallium, germanium, and other critical minerals, Beijing has eased supply chain bottlenecks that had previously threatened U.S. tech manufacturing. This move is particularly beneficial for companies reliant on rare earths for semiconductor production, such as MP Materials, which has secured a $1 billion public-private partnership with the U.S. Department of Defense to expand magnet production.

Investors are also eyeing rare earth ETFs like the VanEck Rare Earth/Strategic Metals ETF (REMX) and Sprott Critical Materials ETF (SETM), which have gained traction amid global supply chain concerns. Meanwhile, USA Rare Earth (NASDAQ: USAR) is positioning itself as a domestic alternative to Chinese dominance, with its "mine to magnet" strategy and recent acquisition of Less Common Metals. JPMorgan's $10 billion investment in critical mineral sectors further underscores the sector's strategic importance.

Risks and Strategic Considerations

Despite these opportunities, the truce's temporary nature-many provisions expire by November 2026-introduces volatility. Geopolitical risks, including unresolved tensions over Taiwan and U.S. export controls on advanced technologies, could reignite trade hostilities. For agribusinesses, overreliance on China's soybean commitments may expose them to sudden policy shifts. Similarly, semiconductor firms face long-term challenges if China re-imposes rare earth restrictions or accelerates its own tech self-sufficiency efforts.

Conclusion

The U.S.-China trade truce offers a window of opportunity for agribusiness and semiconductor investors. Near-term gains in soybean exports and rare earth access are tangible, supported by concrete policy actions. However, the lack of a strategic resolution means investors must balance optimism with caution. Diversification across ETFs and companies with domestic supply chain resilience-such as MP Materials or USA Rare Earth-may mitigate risks while capitalizing on the truce's immediate benefits.