President Donald Trump announced on Wednesday that the United States and China have reached a new agreement. Under this deal, China will supply rare earth minerals and magnets, while the U.S. will continue allowing Chinese students to study at its colleges and universities. The president shared this update on Truth Social, stating that the arrangement is "done" and emphasized the strength of the bilateral relationship.
According to a White House official, the United States will impose a combined 55% tariff on Chinese goods. This includes a 10% standard tariff, a 20% tariff targeting fentanyl-related issues, and an existing 25% tariff. China, in turn, will impose a flat 10% tariff on imports from the United States. The deal still requires final confirmation from both President Trump and Chinese President Xi Jinping.
Trump stated that China would provide "full magnets and any necessary rare earths" up front. He also confirmed the U.S. would deliver on its end of the agreement, particularly the continued acceptance of Chinese students into American educational institutions.
Negotiators from both countries held two days of talks in London to finalize the agreement's terms. These negotiations were preceded by previous talks in Geneva, which had stalled because of Chinese limitations on the export of so-called critical minerals. The U.S. reacted then by launching its export controls, preventing the transfer of technologies in the fields of semiconductors and aircraft parts.
U.S. Commerce Secretary Howard Lutnick said the new framework adds "meat on the bones" of the Geneva agreement, allowing both nations to ease retaliatory tariffs that had escalated to historically high levels. He described the new framework as a necessary step to prevent further economic damage and to reestablish trade cooperation. Despite the progress, officials from both nations acknowledged that this deal does not fully resolve long-standing trade disputes. The agreement focuses on immediate measures to stabilize trade flow and address urgent supply chain concerns.
World markets reacted reservedly to the news, which demonstrates continued uncertainty regarding long-term U.S.–China trade policy. Manufacturing and technology industry leaders have voiced optimism that the deal will alleviate supply chain upheavals, particularly in the industries that use rare earth elements.
The tariff plan by Trump has drawn criticism among businesses that have had to experience increased costs as well as delayed shipments. In both countries, corporate burdens have been increased by port congestion and more compliance requirements. As much as the new agreement can bring in short-term relief, it does not eliminate the possibility of further negotiation and policy changes.