Is the US-China Trade War Finally Coming to an End? Trump Claims Deal is Done!

A New Chapter in US-China Relations

Beijing/Washington: On Wednesday, President Donald Trump declared that a trade agreement with China is finalized after two days of discussions in London, signaling a potential shift in the ongoing trade conflict between the two nations.

Trump shared the news on his social media platform, Truth Social, stating, "Our deal with China is done, pending final approval from President Xi (Jinping) and myself."

This announcement followed the conclusion of negotiations where both parties aimed to settle their trade disagreements.

He elaborated that China would supply essential rare earth materials upfront, while the US would fulfill its commitments, including allowing Chinese students to attend American educational institutions.

Trump noted, "We are imposing a total of 55 percent tariffs, while China will have 10 percent. The relationship is excellent! Thank you for your attention to this matter."

He further emphasized the collaboration between him and Xi to enhance American trade in China, calling it a significant win for both nations.

The discussions in London primarily revolved around China resuming its supply of rare earth metals, crucial for manufacturing smartphones, semiconductors, missiles, and vehicles.

Post-negotiations, US Commerce Secretary Howard Lutnick indicated that the agreement would likely resolve restrictions on rare earth minerals and magnets.

While China had previously halted rare earth exports, the US had limited China's access to American goods, including semiconductors and AI-related technologies.

Lutnick stated, "We have established a framework to implement the Geneva consensus," as reported by a media outlet.

Rare earth elements, comprising 17 metals, are found in various countries, but their extraction is often environmentally damaging and expensive.

The International Energy Agency reports that China produces 61 percent of the world's mined rare earths and controls 92 percent of global output.

Ahead of the US talks, China approved several export licenses for rare earth metals, responding to the increasing global demand driven by sectors like robotics and electric vehicles.

China's recent export restrictions have disrupted automobile and semiconductor manufacturing in several countries, including India.

Reports indicate that Japan's Suzuki halted production of its Swift model due to these shortages.

Trump's announcement followed a phone conversation with Xi last week, which led to the London discussions.

The negotiating teams concluded their talks by agreeing on a framework for review by their respective leaders, aiming to revive the trade ceasefire deal initially signed in Geneva last month.

China expressed concern over US threats to revoke visas for thousands of Chinese students studying in the US.

An official statement from Xinhua noted that both nations made progress in addressing each other's economic and trade issues during their "candid and in-depth" discussions.

Vice-Premier He Lifeng, who led the Chinese delegation, remarked that while China does not desire a trade war, it is prepared to face one if necessary.

He stated, "The two sides should resolve economic and trade differences through equal dialogue and mutually beneficial cooperation. China is sincere in economic and trade consultations, but it also has its principles."

Lutnick, along with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, led the US delegation in what was termed the first meeting of the China-US economic and trade consultation mechanism.

Both nations agreed to temporarily reduce reciprocal tariffs following their discussions in Geneva last month.

This truce is set to last for 90 days, allowing the two largest economies time to negotiate a more comprehensive agreement to conclude their tariff conflict.

Trump had imposed tariffs of 145 percent on Chinese exports worth approximately $439.9 billion, while China retaliated with 125 percent tariffs on US exports valued at about $143 billion.

However, the Geneva truce faced challenges after the US objected to China's failure to lift restrictions on rare earth metal exports.

Under the Geneva agreement, the US reduced tariffs on Chinese goods from 145 percent to 30 percent, while China lowered its retaliatory tariffs from 125 percent to 10 percent.

Analysts suggest that China would not have agreed to lift restrictions on rare earths without receiving significant concessions in return.

Su Yue, principal China economist at the Economist Intelligence Unit, commented, "Trump stated that China would supply magnets and rare earths but did not clarify what the US is offering in exchange, aside from student visas. However, China likely wouldn't have agreed unless it received other substantial concessions. Trump appears to be framing the deal as a victory for the US, but it may indicate that China gained more."