‘Done deal’: Trump says US signed trade agreement with China, as trade war seemingly comes to an end
27 June 2025, 17:50
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Alamy
Donald Trump said the US has signed a trade deal with China, as the Chinese Ministry of Commerce confirmed the two countries “further confirmed the details of the framework.”
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The deal will reportedly make it easier for American firms to get magnets and rare earth minerals from China, but further details are yet to be made public.
The minerals and magnets are critical to manufacturing and microchip production, and “formed the core of a lot of our industrial base,” US treasury secretary Scott Bessent said on Friday.
“We just signed with China the other day,” Trump said at the White House late on Thursday, but didn’t specify the details of the agreement.
The agreement would end the bitter trade war between the two economic superpowers, sparked by Trump’s aggressive policy of imposing import tariffs on other countries.
Two weeks ago, the US president announced that the agreement was a “done deal,” and that the United States will get magnets and rare earth minerals from China, while tariffs on Chinese goods will go down to 55%.
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In return, Trump said the US will provide China “what was agreed to”, including allowing Chinese students to attend American colleges and universities.
That ‘framework’ between two of the world’s largest economies came after two days of high-level talks in London early in June.
On Friday, Mr Bessent said that Trump and Chinese President Xi Jinping “had a phone call” previously “and then our teams met in London, ironed this out, and I am confident now that we, as agreed, the magnets will flow.”
“Part of the agreement was tariffs coming down and rare earth magnets starting to flow back to the US,” Mr Bessent told Fox Business Network.
“They formed the core of a lot of our industrial base. They were not flowing as fast as previously agreed.”
Mr Bessent added of critical mineral exports: “What we’re seeing here is a de-escalation.”
China’s commerce ministry seemed to confirm the news, saying the two sides had “further confirmed the details of the framework”, though its statement did not explicitly mention US access to rare earths that have been at the centre of the negotiations.
“China will, in accordance with the law, review and approve eligible export applications for controlled items. In turn, the United States will lift a series of restrictive measures it had imposed on China,” it said.
Trump’s imposition of tariffs on China earlier this year spiralled into a tit-for-tat economic war, resulting in the US slapping 145% tariffs on Chinese imports, and Beijing responding with a 125% levy on American goods.
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Though the US is normally China’s largest customer, the tariff dispute led to a sharp drop in Chinese exports to the US – a decrease of 35% year on year in May.
The back and forth also caused sharp swings in global markets and threatened to affect the diplomatic relationship between the two countries, until they agreed to halt their dispute and attempt to negotiate a deal.
Trump lowered his tariffs on Chinese goods to 30% for 90 days to allow for talks, and China reduced its taxes on US goods to 10% in an agreement reached last month in Geneva, and tense negotiations have been ongoing ever since.
The US accused China of not exporting critical minerals, and the Chinese government objected to America restricting its sale of advanced chips and its access to student visas for Chinese college and graduate students.
But those degtails were apparently smoothed out after the London talks, as the US president wrote: “Our deal with China is done, subject to final approval with President Xi and me,” on Truth Social.
“Full magnets, and any necessary rare earths, will be supplied, up front, by China. 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!).
“We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent!”
The meeting in London was highly focused on rare earth minerals – which are vital to modern technology including computer chips and electric vehicles, as well as – crucially – military technology.
China holds an effective monopoly over the supply of these metals, and is the largest global supplier of rare earth minerals, producing around 60% of the world’s supply and processing almost 90%.
The bitter tariff war between the two super-powers had already led to fears the automotive industry would suffer immensely, with experts warning the industry would grind to a halt if their supply of rare earths stopped.
Investors and automotive executives can now breathe a cautious sigh of relief, ahead of its final approval by presidents Trump and Xi.