London — President Donald Trump announced on Wednesday that a trade “deal with China is done,” following two days of intense negotiations between U.S. and Chinese trade representatives in London.
While the details of the agreement remain sparse, President Trump confirmed that both he and Chinese President Xi Jinping still need to formally approve the framework.
The negotiations concluded close to midnight on Tuesday, with both countries expressing optimism about easing the trade war that has escalated between them.
Tensions had recently heightened, even after an earlier agreement was reached in Geneva in May to suspend record-high tariffs imposed on each other’s goods. Unless the newly brokered agreement is formalized by both leaders, these tariffs are set to resume on July 9, leading to further economic strife.
Since the Geneva talks, China has drastically cut its exports of crucial rare earth elements to the United States by 50% compared to the previous year. In response, the Trump administration has threatened to revoke visas for Chinese students linked to the Chinese Communist Party.
On Wednesday morning, President Trump took to his Truth Social platform, declaring the deal “done, subject to final approval with president Xi and me.”
According to Trump, the agreement dictates that China will maintain its current 10% tariffs on U.S. goods, while the U.S. will uphold 55% tariffs on Chinese imports.
“President Xi and I are going to work closely together to open up China to American Trade,” Trump continued in a follow-up post. “This would be a great WIN for both countries!!!”
As of now, there has been no immediate confirmation from the Chinese government regarding the specifics of the deal or whether President Xi intends to approve it.
During talks in Geneva, the two nations agreed to put their exceptional tariffs of over 100% on hold for a period of 90 days, resulting in a reduction of U.S. tariffs to their current level of 30%, down from a previous peak of about 145%.
Chinese tariffs currently sit at 10%, a significant drop from the earlier rate of 125% before the Geneva negotiations commenced.
Vice Commerce Minister Li Chenggang, who participated in the London talks, confirmed that an agreement on the framework had been reached, albeit “in principle.”
On Wednesday, Chinese state-run media indicated that the delegations had “made new progress” but withheld any detailed information regarding the terms of the agreement.
U.S. Commerce Secretary Howard Lutnick stated after the London meetings that the framework deal fleshes out the concepts discussed in Geneva, aimed at deescalating retaliatory tariffs.
“The framework deal puts meat on the bones of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs,” Lutnick explained.
He also noted that part of this week’s talks aimed to eliminate the negativity clouding the bilateral relationship that had developed since the Geneva discussions.
“Now we can go forward to try to do positive trade, growing trade,” Lutnick emphasized.
A primary goal for the U.S. is for China to resume and increase shipments of rare earth elements, fundamental to various industries including defense, aerospace, and electric vehicles.
In an all-caps post on Wednesday, Trump stated, “Under the agreement reached in London, full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities.”
He concluded with a positive note on the status of U.S.-China relations, asserting, “Relationship is excellent!”
Industry experts have pointed out that the stakes are high in this trade negotiation, as the potential release of rare earth exports to U.S. manufacturers could address dwindling stockpiles. In exchange, the U.S. is expected to supply aerospace parts and semiconductor programming technology to China.
Carl Weinberg, chief economist at High Frequency Economics, warned that a failure to finalize the deal could risk halting auto and aircraft production, subsequently leading to a significant downturn in economic growth and an uncertain recovery timeline.
The dynamics of this evolving trade relationship will continue to be closely watched as the approval from both national leaders is awaited.
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