US President Donald Trump has declared a trade deal with China "is done" following two days of high-level talks in London. The agreement, pending final approval from both President Trump and President Xi Jinping, aims to de-escalate trade tensions between the world’s two largest economies, addressing critical issues such as rare earth metals and educational access.
Key Takeaways
- President Trump announced a completed trade deal with China, subject to final approval from both leaders.
- The agreement addresses the supply of rare earth metals from China and continued access for Chinese students to US colleges.
- This follows a previous temporary truce that saw both sides accuse the other of breaches.
- The deal aims to implement the "Geneva consensus" and de-escalate ongoing trade disputes.
A Breakthrough in Trade Relations
President Trump, in a post on his Truth Social platform, stated, "Our deal with China is done, subject to final approval with President Xi and me." He further elaborated that China would supply "Full magnets, and any necessary rare earths, up front," while the US would uphold its commitments, including allowing Chinese students to attend American colleges and universities.
Addressing Critical Resources and Education
Chinese exports of rare earth minerals, vital for modern technology, were a central point of discussion during the London meetings. US Commerce Secretary Howard Lutnick indicated that the deal should resolve restrictions on these crucial materials. The US has previously criticised China for slow releases of rare earth metals and magnets, essential for manufacturing everything from smartphones to electric vehicles. Conversely, Washington has limited China’s access to US goods like semiconductors and AI-related technologies.
Framework for De-escalation
Secretary Lutnick confirmed, "We have reached a framework to implement the Geneva consensus." This framework, once approved by the presidents, will guide the implementation of the agreement. The recent negotiations were preceded by a "very good talk" between President Trump and President Xi Jinping. China’s Vice Commerce Minister Li Chenggang echoed this sentiment, stating that both sides had "in principle, reached a framework for implementing the consensus reached by the two heads of state."
Historical Context of Trade Tensions
The current agreement follows a period of escalating trade disputes. Earlier this year, Trump imposed sweeping tariffs on imports, with China being significantly affected. Beijing retaliated with its own higher tariffs, leading to a tit-for-tat escalation that peaked at 145%. A temporary truce in May, brokered in Switzerland, saw US tariffs on Chinese products reduced to 30% and Beijing slashing levies on US imports to 10%, alongside a promise to lift barriers on critical mineral exports. However, both nations subsequently claimed breaches of non-tariff pledges, with the US citing China’s failure to roll back restrictions on rare earth magnets and Beijing pointing to US actions like stopping sales of computer chip design software and cancelling visas for Chinese students.
