Trade Deal Tunes Down Tariff Battle: Trump Announces Pact with China, Focuses on Rare Earths and Student Visas
Trade Agreement with China Remains Intact, Accoring to Trump
It seems the long-standing trade conflict between the US and China is approaching a resolution, as President Trump announces an agreement is imminent, contingent on the final approval of both leaders. According to Trump's statement on his Truth Social platform, China will supply essential rare earth elements and magnets immediately, while American colleges and universities may once again accept Chinese students. Additionally, the future tariff rate has been agreed upon, with the US maintaining a 55% tariff and China offering a 10% rate.
Economic Overview: US Focuses on Rare Earths
According to economic advisor to the US President, Kevin Hassett, the recent discussions in London have centered mainly on Chinese export sanctions for rare earths. Previously, China controlled around 90% of the world market for these vital materials, essential for industries such as automotive and electronics. US President Trump had expressed optimism after a phone call with China's state and party leader Xi, that China would restart the supply of rare earths.
The heavily anticipated agreement is broken down as follows:
- Tariffs: Trump announced that the US will charge a 55% tariff on Chinese imports, with 10% as the foundation, and an additional 20% for fentanyl-related seized shipments, and 25% for pre-existing duties. In contrast, China will continue to implement a 10% tariff on US goods. 1
- Rare Earth Minerals and Magnets: China has agreed to simplify restrictions on the export of rare earth minerals and magnets, critical for numerous industries. China will now issue export licenses based on "reasonable needs," and applications that meet the criteria have already been approved. Additionally, China will supply any necessary quantities of rare earths and magnets to the US. 1
- Chinese Students in US Universities: The US will now allow more Chinese students to attend American universities, marking a reversal in recent tightening of admission policies for Chinese nationals at US colleges. This aspect is viewed as part of the broader effort to promote positive bilateral relations and maintain the exchange of talent and knowledge. 3
Implications and Considerations:
- Economic Impact: If finalized, the deal could help stabilize the trade tensions, particularly affecting strategic sectors like technology and manufacturing that rely heavily on rare earth minerals. However, the unusually large tariff difference (55% US vs. 10% China) may prompt further renegotiations or adjustments. 2
- Industrial Supply Chains: loosening the rare earth export controls could alleviate supply chain disruptions, benefiting US manufacturers, particularly automotive and electronics sectors. 3
- Educational and Cultural Exchange: By reinstating the inflow of Chinese students to US universities, both nations may foster improved cultural and scientific collaboration, although concerns over security and academic integrity persist. 1
- Political Dynamics: The agreement is viewed as a "framework" that hinges on the final approval from Presidents Trump and Xi Jinping, indicating that both sides continue to wield leverage over the implementation process. 1
Sources:
- ntv.de, mau/DJ/dpa
- The Guardian, S.C.
- The Hill, D.M.
Keywords:- Trade war- US-China relations- Rare earth minerals- Tariffs- President Xi Jinping- President Donald Trump- Trade- Trade conflicts- Trade negotiations- US agreements with EU
- The employment policy within the community may need to address the increasing demand for skilled workers in the rare earth industry, given the anticipated influx of rare earth elements and magnets from China.
- The financial implications of the trade deal extend beyond the business sector, impacting political decisions and shaping the broader general-news landscape, as the US and China navigate their complex trade relations.
