Unlocking Trade Tensions: Trump Claims 'Done' Deal with China on Rare Earths
In a bold announcement, President Donald Trump declared that a deal with China concerning the supply of rare earth metals and magnets is finalized, pending approval from President Xi Jinping. This breakthrough came after two days of intense negotiations in London, aimed at alleviating trade tensions that have grown since a truce was established in May, following severe tariff escalations that threatened to cripple trade between the US and China, the world’s two largest economies.
Despite the headlines, the specifics of the deal remain unclear, raising concerns about the effectiveness of the US’s tariff strategies in forging significant trade agreements. Trump indicated he plans to announce unilateral tariff rates in the coming weeks, while US Treasury Secretary Scott Bessent hinted at extending existing pauses on certain tariffs to foster ongoing trade discussions.
China’s response to the negotiations was described by Vice Commerce Minister Li Chenggang as a framework to implement previous agreements made during the phone call between Trump and Xi. That suggests that while an agreement has been reached in principle, further details and commitments are needed before full implementation. Following the talks, US Commerce Secretary Howard Lutnick expressed optimism, noting a positive direction in negotiations but admitting that a comprehensive deal would take longer to finalize.
The backdrop of these negotiations involves mutual critiques, such as Chinese allegations regarding the US’s restrictions on semiconductors and artificial intelligence technology, coupled with US frustrations over China’s export slowdowns of vital manufacturing minerals. While the proposed deal seems to bring some relief, analysts like Terry Haines stress that its limited scope does not signify a broader resolution of the complex trade landscape between the two superpowers. The long-term future of US-China trade relations seems uncertain, with ongoing economic policies and geopolitical maneuvers continuing to play a crucial role.