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After two days of negotiations, the United States and China appear hopeful about the progress they’re making on a trade deal. But let’s take a look at what actually went down this week.
Both countries say they have a "framework" that basically gets trade talks back to the agreement they made in Geneva a month ago. That agreement paused Donald Trump’s 145% tariff on China and China’s 125% tariff on U.S. exports, reducing them to 30% and 10%, respectively.
So if you call that a truce, it’s a thin one.
Commerce Secretary Howard Lutnick said Wednesday that, as part of the agreement, China will start granting rare earth export licenses for U.S. companies immediately. Those materials are vital for automakers, semiconductor manufacturers and other tech companies. But those licenses will only last six months, The Wall Street Journal reported, citing people familiar with the matter.
Also, as part of the deal, there are reports that the U.S. will ease restrictions it placed on its own exports of technology and other products to China. And the administration will also reportedly pull back on cancelling visas for Chinese students.
So if you call that a truce, it’s a thin one. Why? We still need to wait and see if Trump and Chinese President Xi Jinping approve the concept. (Though that didn’t stop the president from also declaring on social media, "Our deal with China is done.") And if they do, we also need to know when they actually plan to implement it.
Lutnick also said that our tariffs on China are not going to change from their current levels. So I guess we’re not going back up above 100%? That might sound like good news. Except, remember, the U.S. has already added 30% tariffs on Chinese imports since Trump took office — and China hit us back with 10% tariffs. And for those trying to follow the back and forth, the deal actually leaves tariffs on China at 55% after including the 25% tariffs already in place before Trump came into office.
Meanwhile, that 90-day countdown clock is still ticking for all the other countries that have to negotiate new trade deals with us. However, on Wednesday, Treasury Secretary Scott Bessent told House lawmakers that it’s "highly likely" Trump will push back that July 9 deadline for countries engaged in good-faith negotiations.
All of which makes these hard-line trade deal deadlines seem more like a soft promise written with erasable ink.