Source: NY Post
Date: 12th June 2025

Agreement outlines rare earth supply, tariff adjustments, and market access as both sides seek stability ahead of further talks.

The United States and China have reached a framework trade agreement following two days of intense negotiations.

The U.S. President announced that both nations had come to terms, pending final approval by China’s leadership.

Under the deal, China has agreed to temporarily supply rare earth materials and other magnets, while the U.S. will uphold previously discussed educational exchanges and impose a combined 55% tariff on Chinese goods. In return, China will maintain a reduced 10% tariff rate on most American imports.

While the White House has framed the outcome as a win for both countries, some elements of the agreement remain provisional. Licenses for China’s rare earth exports will only be valid for six months, potentially giving Beijing leverage in the event of future tensions.

U.S. officials emphasized that market access concessions from China are being addressed separately and noted that the two economies are in a “positive phase” of relations. Despite the diplomatic momentum, financial markets remained flat, showing caution amid ongoing economic uncertainty.

U.S. trade and economic officials underscored that China’s current economic imbalance—particularly its real estate troubles—is influencing its trade strategy.

The Treasury Secretary warned lawmakers that allowing China to “export its way back to prosperity” could undermine global wage standards. The deal reflects elements of a previous Geneva consensus and includes revised tariff baselines: 30% for most Chinese goods (down from 145%), and a combined U.S. rate that includes penalties tied to previous disputes and ongoing policy concerns.

Negotiators now have until August 10 to finalise a broader, more permanent agreement.