• Global stock markets surge as the U.S. and China begin dismantling trade restrictions, signaling a new era of cooperation.
• U.S. lifts export bans on chip design software and ethane, benefitting giants like Synopsys, Cadence, and Siemens, and stabilizing global tech supply chains.
• China agrees to review rare earths exports while the U.S. cancels key restrictions, paving the way for normalized bilateral trade.
• Investors worldwide cheer the breakthrough, with stock indexes from Wall Street to Shanghai seeing sharp gains on hopes of lasting economic stability.

In a historic turn of events that is sending ripples of optimism through global financial markets, the United States has lifted significant restrictions on exports to China, signaling the beginning of the end of the bitter trade war between the world’s two largest economies. Stock markets from New York to Shanghai rallied on Thursday, fueled by hopes that Washington and Beijing are finally embracing ground realities, working towards mutual economic stability, and opening their doors to renewed cooperation.

The key breakthrough came as the United States removed export restrictions on Chinese access to Electronic Design Automation (EDA) software—critical for chip design—as well as ethane exports. The decision affects major American technology leaders including Synopsys (SNPS.O), Cadence Design Systems (CDNS.O), and Germany’s Siemens (SIEGn.DE), who together control more than 70% of China’s EDA software market.

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Shares of Siemens surged 1.7% in early European trading, while Synopsys and Cadence both saw pre-market gains in New York. Investors worldwide greeted the news as a long-awaited thaw in relations between Washington and Beijing, whose prolonged trade war had disrupted supply chains, stoked inflation, and rattled stock exchanges for years.

A Global Shift Investors Have Been Waiting For

The news is being hailed as the first concrete step toward removing artificial barriers that have hurt businesses and consumers on both sides of the Pacific. “This is what the world has been waiting for,” said Michael O’Connor, chief economist at Global Markets Advisory. “Trade restrictions between the U.S. and China not only threatened their economies but also put the global economy at risk. This marks the beginning of a more rational and cooperative era.”

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The immediate impact was visible on stock exchanges. The S&P 500 rose 1.4%, the Dow Jones Industrial Average added 320 points, and the tech-heavy Nasdaq surged 1.9% as investors rushed to price in the implications of renewed U.S.-China cooperation. Hong Kong’s Hang Seng Index jumped 2.3% while Shanghai’s Composite Index gained 1.7%.

Emerging markets currencies, particularly in Asia, also strengthened as risk appetite returned to financial markets, with the Chinese yuan climbing 0.5% against the dollar.

The Chip Design Breakthrough

The lifting of restrictions allows Synopsys, Cadence, and Siemens to resume full software and technology support to Chinese clients. These tools are essential for designing advanced semiconductor chips, a sector where China has faced mounting pressure under U.S. export controls.

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“Without EDA software, China’s chip design ecosystem would have collapsed within months,” explained Dr. Lily Chen, senior analyst at Semiconductor Digest. “The U.S. move ensures not just commercial stability but also global semiconductor supply chain continuity, which is critical for industries ranging from smartphones to electric vehicles.”

Synopsys, in an internal letter seen by Reuters, told staff that it expects to fully restore services to Chinese clients within three business days. Siemens confirmed similar steps, adding that the U.S. Commerce Department notified them of the policy change earlier this week.

Ethane Exports Back on Track

In another sign of easing tensions, the U.S. also lifted restrictions on ethane exports to China—vital for the petrochemical and plastics industries. The licensing requirement, imposed in May, had jeopardized multi-billion-dollar energy deals between American producers and Chinese buyers.

American ethane producers welcomed the move. “This is a relief for the U.S. energy sector,” said John Mitchell, president of the U.S. Petrochemical Association. “China is one of our largest markets. Restoring these exports means preserving thousands of American jobs.”

A Delicate Balancing Act

The recent developments follow intense negotiations between Beijing and Washington. On Friday, China’s Ministry of Commerce confirmed that both countries agreed on a new framework: China will streamline export licensing for critical minerals, including rare earths, while the U.S. will ease countermeasures targeting key Chinese industries.

The rare earths issue was a flashpoint earlier this year when China temporarily suspended exports of these essential materials—used in everything from electric vehicle batteries to fighter jets—triggering retaliatory measures from the Trump administration. The fear of supply chain disruptions pushed prices of rare earths to record highs, while manufacturers scrambled for alternatives.

“By de-escalating restrictions on both sides, the U.S. and China are acknowledging that their economies are too intertwined to decouple entirely,” said Professor Elena Morales, an expert on U.S.-China relations at Harvard’s Kennedy School. “This is not just good for trade—it’s essential for geopolitical stability.”

What’s Next?

While not all restrictions have been lifted—licenses for GE Aerospace to supply engines to China’s COMAC and for nuclear equipment exports remain suspended—analysts say momentum is now on the side of de-escalation.

“Expect more barriers to fall in the coming weeks,” said the U.S. official familiar with the talks. “We are moving back to the status quo we had before the trade war heated up.”

Markets are betting on it. And for the first time in years, the world’s two biggest economies seem to be betting on each other again too.