In a surprising turn of events, former president Donald Trump announced a preliminary trade agreement with China, addressing tariffs and the supply of rare earth minerals.According to a post on his social media platform,”The agreement with China has been concluded -Trump wrote on his Social Truth -,subject to the definitive approval of President XI and Mia. China will provide in advance all the magnets and the necessary rare lands. At the same time, we will guarantee China what has been agreed, including Chinese students who attend our colleges and universities (which I have always liked!)”. He added that the report is ‘excellent’ and that “President XI and I will work closely to open China to American trade. It would be a great victory for both countries!”

The agreement,which is still subject to final approval from President XI,aims to de-escalate trade tensions that have been ongoing for months.

Details of the Proposed Agreement

Negotiations between american and chinese delegations took place in London. The agreement establishes a framework for mutual tariff reductions, though less drastic than initially threatened. The United States will maintain a 5% tariff on Chinese goods, while China will levy a 10% duty on imports from the US. Crucially, Beijing has pledged to prioritize the supply of rare earth magnets, essential for US technology and defence industries. The agreement also includes the reinstatement of study programs for Chinese students in the United States, according to Trump’s statement.

“The agreement with China has been concluded…President XI and I will work closely to open China to American trade. It would be a great victory for both countries!”

China’s Response

While expressing a more measured tone, China also signaled a willingness to compromise. Deputy prime minister He Lifeng stated that China’s position on trade with the US is ‘clear and coherent’. He emphasized that “the parties should honor their commitments, move to protect the results achieved in dialogue and resolve commercial disputes with the peo’s dialogue and the benefit mortgage cooperation”. Lifeng also suggested the possibility of strengthened cooperation and further evaluations of progress.

Analysts’ Concerns

Despite the positive rhetoric, some analysts remain skeptical. The financial Times described the agreement as a “fragile compromise,” suggesting it may not lead to a lasting resolution and could perpetuate uncertainty in global trade. Sam Stovall of CFRA noted that the agreement provides only temporary relief to markets,lacking concrete details on benefits for US companies. Julian Evans-Pritchard of Capital Economics argued that China secured a favorable position, obtaining tariff reductions without significant concessions on key strategic issues. concerns where also raised about the limited scope and unclear details surrounding the resumption of Chinese student programs.