What's happened
On June 12, 2025, President Trump announced a new trade agreement with China following two days of negotiations in London. The deal includes increased tariffs on Chinese imports and access to rare earth elements for the US, pending approval from both leaders. However, the deal's specifics remain unclear, raising concerns about its longevity.
What's behind the headline?
Key Points of the Agreement
- Tariffs: The US will impose a 55% tariff on Chinese imports, while China will maintain a 10% tariff on US goods.
- Rare Earth Elements: China will supply the US with necessary rare earth elements, crucial for various industries.
- Student Visas: The US will allow Chinese students to study at American universities, reversing previous threats to revoke visas.
Implications
- Economic Impact: While the deal may stabilize trade relations temporarily, experts warn that the high tariffs could still hinder long-term economic cooperation.
- Political Dynamics: The agreement reflects ongoing negotiations but lacks clarity on critical issues like export controls on technology, which could lead to future tensions.
- Market Reactions: Analysts have noted a limited market response, indicating skepticism about the deal's effectiveness and permanence.
What the papers say
According to the South China Morning Post, Trump declared the deal 'done' on his Truth Social platform, emphasizing the supply of rare earths and student access. However, the specifics remain vague, with many analysts, including Wilbur Ross from Business Insider UK, suggesting the agreement is modest and lacks comprehensiveness. The Wall Street Journal highlighted potential limitations on export licenses, indicating that the deal may not fully resolve underlying tensions. Meanwhile, Chinese state media called for equal dialogue, reflecting a cautious approach to the negotiations.
How we got here
The US-China trade relationship has been fraught with tension, marked by reciprocal tariffs and export controls. Recent negotiations aimed to address these issues, particularly around rare earth minerals and student visas, following a temporary truce established in Geneva.
Go deeper
- What are the main points of the trade agreement?
- How will this deal affect US-China relations?
- What are experts saying about the longevity of this agreement?
Common question
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What Does the New US-China Trade Deal Mean for Relations?
The recent trade deal between the US and China has sparked numerous questions about its implications for both countries. As President Trump announces the agreement, many are curious about how it will affect various sectors, including education and supply chains. Below, we explore the most pressing questions surrounding this significant development.
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What Does Trump's New Trade Deal with China Mean for the US?
President Trump's recent announcement of a trade deal with China has raised many questions about its implications for US-China relations and the economy. As the details unfold, it's essential to understand what this agreement entails and how it might affect various sectors. Below are some common questions and answers regarding this significant development.
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