WASHINGTON — President Donald Trump on Wednesday announced a finalized trade agreement with China, ending months of economic brinkmanship with a deal that delivers key materials to U.S. industry while maintaining leverage through tariffs.
The agreement requires China to deliver rare earth elements and industrial magnets to the United States upfront — a marked reversal from just two months ago, when Beijing restricted exports following Trump’s initial round of tariff hikes.
In return, the U.S. will continue allowing Chinese students to attend American colleges and universities. That condition, quietly baked into the deal, underscores the administration’s willingness to preserve certain diplomatic and cultural ties amid broader economic rivalry.
Tariffs Tilt Heavily Toward the U.S.
Under the new terms, American tariffs on Chinese goods will rise to a combined 55%. In contrast, China will keep its own tariffs on U.S. imports at just 10%. Trump touted the asymmetry as a win for the U.S., writing on social media: “We are getting a total of 55% tariffs, China is getting 10%.”
Talks Held in London Yield Breakthrough
The deal follows two days of negotiations in London involving high-level trade officials from both sides. The primary objective: lower the temperature on an increasingly volatile economic conflict that has weighed on global markets and critical supply chains.
Analysts are calling the agreement a stabilizing move — especially for U.S. manufacturers who depend on rare earths for everything from defense systems to smartphones.
The Wall Street Journal continues:
Trump and Chinese leader Xi Jinping need to approve the agreement, which would lift some U.S. export restrictions in exchange for speeding the flow of rare earths. Commerce Secretary Howard Lutnick told The Wall Street Journal that he expects Trump to approve the agreement as soon as Wednesday or Thursday.
The deal appears to allow China to maintain an export-control system for rare earths established in April after Trump heaped extra duties of 34% on Chinese products. That would allow Beijing to clamp down on supplies again in the future. And licenses for U.S. manufacturers to import rare earths from China would have a six-month limit, people familiar with the deal said.
“China’s going to want to maintain leverage,” said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies in Washington. China’s dominance “puts American companies at direct risk given that any sort of agreements that have been made can be reneged on,” she said.
China’s decision this year to cut back on exports of the magnets for just a couple of months sent shock waves through the global auto, electronics and defense industries. That helped drive the U.S. and China back to the bargaining table this week. China wanted the U.S. to lift export restrictions on technology including aviation parts in exchange for U.S. access to the rare-earths components.
Path Forward With Xi
Trump also signaled interest in further cooperation with Xi, expressing hope that the deal would lay groundwork for opening Chinese markets more broadly to American goods and services.
He described the agreement as “excellent” for both countries, even as competition remains fierce.
Caution From Industry Experts
Despite the progress, trade and defense analysts caution that China’s significant dominance in global rare earth element processing still presents a long-term strategic threat. Experts say the U.S. must now focus on diversifying supply chains and investing in domestic alternatives to reduce dependence.
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