New Trade Agreement Tentatively Reached with China

President Donald Trump announced on Wednesday that his administration has tentatively agreed on a trade truce with China. The discussions, which took place in London, are leading towards an agreement contingent upon approval from both President Trump and Chinese President Xi Jinping. According to President Trump’s statements on Truth Social, China will supply “full magnets, and any necessary rare earths.”

In terms of tariffs, President Trump stated that the U.S. would implement a 55 percent tariff on Chinese goods, while China agreed to impose a 10 percent tariff on U.S. products. “Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!),” Trump added, characterizing the U.S.-China relationship as “excellent.”

Details of the London Negotiations

The push towards this tentative agreement followed after intensive meetings in London between top economic officials from the U.S. and China. Representing the United States were Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer.

Prior negotiations had seen a decrease in the tariff rate on Chinese imports from 145 percent to 30 percent, while Beijing reduced its tariff on U.S. goods from 125 percent to 10 percent. However, progress had recently stalled, with President Trump accusing China earlier this month of violating the earlier trade agreement. The specifics of the alleged violation were not disclosed by the President.

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Efforts to revitalize discussions included a direct conversation between President Trump and President Xi, focusing solely on trade matters. Their conversation was aimed at overcoming hurdles and moving forward with constructive trade negotiations.

Broader Tariff Strategy

Earlier in the year, the Trump administration had implemented significant tariffs on Chinese goods, notably including a 20 percent duty related to the issue of fentanyl trafficking. Additionally, the administration set a “reciprocal” tariff policy affecting various countries based on trade imbalances.

On April 2, President Trump announced these “reciprocal” tariffs, which affected numerous countries. However, a change occurred a week later with a 90-day reprieve lowering the tariff rate to 10 percent on all imports. This grace period is slated to expire on July 8, with the trade agreement with the United Kingdom being the only one announced so far. President Trump has signaled readiness to adjust tariff rates on other nations if further agreements are not reached soon.

The developments between the U.S. and China are part of President Trump’s broader trade strategy to protect American interests and ensure fair trade practices with other nations.