U.S. and China Reach Trade Deal
The U.S. and China have agreed in principle to a new framework that could ease export restrictions and put their shaky trade truce back on course. After two days of talks in London, both countries said they had settled on a plan to roll back tariffs and restrictions imposed over the last few months. U.S. Commerce Secretary Howard Lutnick said the framework "puts meat on the bones" of a previous agreement made in Geneva and would be sent to President Trump and President Xi for approval.
President Trump declared the deal “done” in a Truth Social post, noting that it includes that “full magnets, and any necessary rare earths, will be supplied, up front, by China.” In return, the U.S. will allow Chinese students to attend American universities and ease some of its own export controls. Trump also said the U.S. will retain a 55% tariff, while China will hold at 10%, calling the relationship “excellent.” The deal comes after months of retaliatory trade actions that saw tariffs spike as high as 145% and tech restrictions hit chip sales and student visas.
Markets responded cautiously to the announcement, with investors waiting to see if concrete changes follow. Several Chinese rare earth firms said they’ve been granted new export licenses, signaling a possible easing of Beijing's grip on the critical minerals used in electronics and defense. Still, with no detailed timelines or volumes disclosed, both sides now face an August 10th deadline to finalize the deal—or risk another tariff escalation. As one Beijing lawyer put it, “fighting a trade war in the context of global integration is a lose-lose situation.”
