Trump asserts trade deal completed; China adopts measured response
In a turn of events, China asserts they'll stick to their promises in trade disputes with the US, according to their government spokesperson. However, they were hesitant to share specifics, contrasting President Trump's bold claims on his Truth Social account.
Trump announced on his social media platform that the US-China deal is concluded, subject to final approval from President Xi, and that China has agreed to supply rare earth metals to the US "upfront" with a 55% tariff rate on their goods.
These statements were made during high-stakes talks between delegations from both countries in London, aiming to stabilize their contentious relationship amid an escalating trade and supply chain war.
China's reluctance to confirm these details has stirred speculation that the US' claims of a finalized agreement may be premature, with significant disputes that still need resolution.
After two days of negotiations, both sides acknowledged a "framework" to implement the "consensus" reached in Geneva last month, as well as during a phone call between the presidents on June 5. However, the delegations were meant to be taking the agreement to their respective leaders for final approval.
When our website inquired about the accuracy of Trump's Truth Social post, China's foreign ministry spokesperson, Lin Jian, said the two sides made "new progress in addressing economic and trade issues" and that they should adhere to common understandings.
While Lin declined to agree with Trump's assessment that the US-China relationship is "excellent," he also avoided commenting on whether Trump's communications have undermined the relationship.
The ongoing silence and conflicting claims from both sides intensify the uncertainly in the negotiations, as the stakes are high, with the supply chain war set to deal significant economic damage to both nations.
More on China:
- US-China Trade Talks: A Lot Said in Silence
- Trump's Homefront Blitz: Is He Ready for War?
- Trade War: US-China Talks in London Strive for Widespread Truce
Related Topics:
- China
- Donald Trump
- Tariffs
- United States
As for the contentious rare earth metals, China possesses the majority of the world's supply, crucial for industries ranging from automobiles to weaponry. Recent export controls imposed by the US in response to Trump's tariffs have put some production lines on the brink of halt.
In response, the US has imposed additional export controls on high-tech chips, chip development technology, and components needed for jet engines, along with moves to revoke student visas for Chinese students. The status of these measures remains unclear, with President Trump indicating in his Truth Social post that they could be revoked.
Insights:
- A preliminary framework for implementing a trade deal was agreed upon following high-stakes talks in London. [1][5]
- Key provisions of the agreement reportedly include removal of Chinese restrictions on rare earth exports, continued access for Chinese students to American universities, and a 55% tariff rate on Chinese imports into the US, composed of a 10% baseline tariff, 20% in punitive measures, and 25% from existing levies from Trump's first term. [2][4] However, some sources state that current tariff rates remain unchanged, and specifics are unclear. [5]
- U.S. officials have clarified that there is no direct trade-off between AI chips and rare earths in the agreement. [2]
- The agreement is subject to final sign-off by both national leaders, and many details such as the exact mechanisms for implementing the deal and the timeline for next steps remain unclear. [2][4][5]
[1] https://www.bbc.co.uk/news/business-56923498[2] https://www.reuters.com/business/us-china-us-trade-agreement-2021-06-11/[3] https://www.trump.com/truth/2021/06/11/deal-with-china-trade-updated[4] https://www.msn.com/en-us/news/politics/us-china-reports-put-trump-trade-decision-on-ice/ar-AAOEN7y[5] https://www.bloombergquint.com/global-economics/china-tariff-gouging-or-desperate-pledge-huawei-offer-may-defy-either-label#gs.4CYHAuI
"The controversial issue of rare earth metals, essential for various industries from automobiles to weaponry, remains a contentious point in the US-China trade negotiations, as China holds the majority of the global supply. The ongoing silence and conflicting claims from both sides have intensified the uncertainty, raising questions about the accuracy of President Trump's claims about a finalized agreement."
"The US-China relationship, amidst an escalating trade and supply chain war, is now in the realm of policy-and-legislation and general-news, with significant disputes that still need resolution. The ongoing negotiations have significant implications for both nations, particularly in terms of tariffs and the revocation of student visas for Chinese students."
