President Donald Trump announced on Wednesday that China has agreed to facilitate American access to crucial magnets and rare earth minerals, paving the way for ongoing negotiations between the United States and China, the world’s two largest economies.
In exchange, Trump indicated that the U.S. would halt efforts to revoke visas for Chinese nationals studying at American colleges.
The announcement followed two days of high-stakes trade talks held in London.
However, specifics surrounding the agreement remain vague.
Trump did not fully clarify what concessions were made by the U.S. government, and Beijing has yet to confirm the details of any agreements reached.
Both Chinese President Xi Jinping and President Trump still need to formally endorse the proposed framework.
Describing this arrangement as a ‘deal’ is somewhat misleading; it is more accurately characterized as a ‘framework’ that aims to lay the groundwork for more substantive discussions ahead.
Trump’s own remarks have contributed to a lack of clarity regarding changes to tariffs on Chinese imports, leading to uncertainty about over $660 billion in yearly trade between the two nations.
On social media, Trump proclaimed: ‘WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!’
However, a White House official, speaking anonymously and not authorized to discuss the terms, clarified that the 55% figure was not an increase above the previous 30% tariff but included pre-existing tariffs from Trump’s initial term in office.
Rick Woldenberg, CEO of the educational toy company Learning Resources, expressed bewilderment at the situation, stating, ‘We have no idea what the rules are.’
In a follow-up post, Trump asserted that he and Xi ‘are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!’
The discussions culminated late on Tuesday in London after intensive negotiations involving key U.S. officials, including Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.
The Chinese delegation was led by Vice Premier He Lifeng.
Since taking office, Trump has utilized tariffs aggressively as a means to generate revenue for the federal government, protect American jobs, and encourage businesses to relocate production back to the United States.
His administration has implemented a baseline 10% tariff on imports from nearly every country, after introducing and subsequently suspending higher tariffs based on prior-year trade deficits.
For American trading partners and businesses evaluating their import tax obligations, Trump’s fluctuating trade policy often proves confounding.
Notably, he recently doubled tariffs on steel and aluminum to 50%, a move that is likely to inflate costs for U.S. manufacturers and construction firms that rely on these metals.
His stance toward the European Union has also shifted dramatically; having initially threatened a 50% tariff as a tactic to propel negotiations, he later retracted that threat as the self-imposed deadline approached.
Yet, Trump’s approach to dealings with China has been particularly erratic.
After imposing a 20% tariff on Chinese goods, he quickly escalated it to 54% to address perceived unfair trade practices.
Frustrated by China’s retaliatory tariffs, he further increased them to a staggering 145%, prompting Beijing to respond with 125% tariffs on U.S. exports.
These aggressive tariffs posed a risk of effectively severing trade between the U.S. and China, resulting in turmoil in financial markets.
In a meeting last month in Geneva, both countries agreed to a de-escalation: reducing America’s tariffs back to 30% and China’s to 10%.
However, in April, the Chinese government announced new licensing requirements that hindered the flow of critical rare earth minerals to the U.S.
Outraged by this development, Trump warned he might revoke the Geneva agreement, thereby setting the stage for discussions in London earlier this week, during which both parties agreed to expedite shipping of rare earth materials to the U.S.
The background of this agreement comes amid a significant report from an international rights group, which indicates that numerous global brands may inadvertently be involved in forced labor situations through their supply chains connected to critical minerals sourced from the Xinjiang region of China.
The report from Global Rights Compliance stated that companies such as Avon, Walmart, Nescafe, and Coca-Cola could be tied to titanium sourced from Xinjiang, where allegations of coercive labor practices against predominantly Muslim Uyghurs and other Turkic minorities have surfaced.
Despite the ongoing discussions and reported agreements, many analysts believe the heightened tensions have not yielded substantial progress.
Dan Kritenbrink, who served as assistant secretary of state for East Asian and Pacific Affairs during the Biden administration, characterized the London meeting as resulting in ‘a fragile truce.’
Kritenbrink added, ‘Both sides have now demonstrated that they know where the other’s weak points are.’
He noted that the Chinese government retains significant leverage over the U.S. regarding rare earth materials, stating, ‘They can turn that spigot on and off at will, and they’re not afraid to use it.’
Nonetheless, he expressed relief over the London ceasefire, remarking that ‘the alternative is no truce at all and a supply chain war threatening the global economy.’
Danny Russel, vice president for international security and diplomacy at the Asia Society Policy Institute, suggested that Trump’s latest strategy against China appears to be ‘ending with a whimper, not a bang.’
Russel further noted that ‘the U.S. found it needed to back off the restrictions it had thought would generate leverage,’ leading to a situation where it exchanged restrictions for a mere commitment from China to expedite its supply of critical minerals.
Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center, dismissed the London truce as little more than ‘a handshake deal’ that could change at any moment.
image source from：https://www.pbs.org/newshour/economy/trump-says-u-s-will-get-rare-earth-minerals-from-china-and-tariffs-on-chinese-goods-will-total-55-under-new-trade-framework
