The U.S.-China Trade Truce: Strategic Opportunities in Rare Earths and Agriculture

The U.S.-China trade truce, announced in late 2025, marks a pivotal shift in global economic dynamics. By addressing critical sectors like agriculture and rare earths, this agreement not only stabilizes markets but also creates near-term investment opportunities for forward-thinking investors. Let's break down the key plays emerging from this de-escalation.

Soybean Producers: A Boon for U.S. Farmers

China's commitment to resume U.S. soybean imports under the trade truce is a lifeline for American farmers. China has pledged to purchase 12 million metric tons of U.S. soybeans by January 2025, followed by 25 million metric tons annually for the next three years, according to a FarmWeekNow report. This aligns with historical import levels and signals a reversal of China's recent shift to sourcing from South American suppliers during the trade conflict, as noted in a Reuters report.

State-owned Chinese company COFCO has already begun executing this agreement, securing 180,000 metric tons of soybeans for December and January shipments, Reuters sources said. For U.S. soybean exporters, this represents a surge in demand that could stabilize prices and reduce financial strain. While specific U.S. companies aren't named in the research, the broader agricultural sector-particularly those with established export infrastructure-stands to benefit. Investors should monitor companies with strong ties to the Pacific Northwest port terminals, where much of the soybean cargo is being shipped, as Reuters also reported.

Rare Earths: A Geopolitical Power Play

The truce also addresses the U.S.'s reliance on China for rare earth elements (REEs), which are critical for tech, defense, and green energy sectors. China controls over 70% of global rare earth reserves and dominates refining, according to an OilPrice report. However, the U.S. is now accelerating efforts to diversify its supply chains.

A landmark $8.5 billion partnership between the U.S. and Australia, announced by President Donald Trump and Prime Minister Anthony Albanese, includes investments in mining, processing, and refining facilities, the OilPrice report explains. The U.S. is contributing $3 billion to this initiative, with projects like a gallium refinery in Western Australia and unlocking $53 billion in critical mineral deposits. This collaboration is part of a broader strategy to counter China's dominance, alongside alliances with Japan, Malaysia, and other nations.

U.S. companies like Ramaco Resources are already capitalizing on this shift. The firm recently partnered with the Energy Department to advance rare earths projects, including the Brook Mine in Wyoming, which holds the largest unconventional rare earth deposit in the U.S., according to Seeking Alpha. Investors should also watch Alcoa, which is involved in a gallium recovery initiative under the U.S.-Australia deal, as covered by CNBC.

Geopolitical Risk Mitigation: A Tactical Edge

The trade truce reduces immediate risks for both nations. The U.S. cut fentanyl-related tariffs on Chinese goods from 20% to 10%, while China agreed to delay rare earth export controls for one year, as reported in a Politico article. This creates a window for companies to secure supplies without the volatility of geopolitical tensions.

For investors, this means tactical entry points in sectors poised to benefit from stabilized trade flows. Soybean producers can lock in contracts with China, while rare earths suppliers can leverage U.S. government funding and partnerships. The G7's critical minerals alliance further reinforces this trend, aiming to reduce reliance on China by investing in global supply chains, according to an SCMP article.

Conclusion: Positioning for the Near Term

The U.S.-China trade truce isn't a permanent solution but a strategic pause that offers immediate opportunities. For soybean producers, the 12 million metric ton commitment is a near-term tailwind. For rare earths, the U.S.-Australia partnership and domestic projects like Ramaco's Brook Mine represent long-term plays with 2025 catalysts.

Investors should prioritize companies with direct exposure to these sectors, particularly those with government backing or established international partnerships. As the truce unfolds, monitoring China's adherence to its commitments and the U.S.'s progress in rare earths diversification will be critical.