President Donald Trump isn’t going to bulldoze China on trade like he did Europe. Two days after the EU agreed to a framework trade deal with the White House that some of the bloc’s national leaders regard as a capitulation, Trump’s negotiators left talks with Chinese President Xi Jinping’s team in Sweden with no breakthrough.

The U.S. and China have reached an agreement — again — to deescalate trade tensions. China is making it easier for U.S. companies crucial magnets and rare earths materials.

Tariffs are rising sharply in 2025, with the US rates jumping to 13.3%—the highest since 1939—fueling global uncertainty and triggering a projected $2 trillion hit to global GDP by 2027.

The economy was supposed to crumble. The trade war was expected to escalate out of control. Markets were forecast to plunge. None of that has happened. But Trump’s early trade victory may be short-lived.