In a recent announcement, President Donald Trump confirmed that the United States will keep tariffs high on Chinese goods. This statement was made on Wednesday morning as he highlighted a preliminary trade agreement that still requires the approval of both himself and Chinese President Xi Jinping. Trump emphasized that China will provide essential rare earth minerals and magnets “up front,” although he did not specify the exact terms of this arrangement.
Trump also claimed, without further explanation, that “we are getting a total of 55% of tariffs, China is getting 10.” A White House official clarified to NBC News that this 55% figure is not new; it combines the 30% tariffs Trump introduced earlier this year with pre-existing duties that total 25%. On CNBC, Commerce Secretary Howard Lutnick mentioned that tariff rates applied by the U.S. on Chinese imports are unlikely to change in the near future. However, it is important to note that Trump has modified tariff rates on China at least three times since April 2.
This announcement followed two days of high-level negotiations between U.S. and Chinese officials in London, aimed at re-establishing a trade truce originally brokered in Geneva last month. While Trump’s statement on Truth Social went beyond what Lutnick described regarding the negotiations, the Commerce Secretary stated, “We have reached a framework to implement the Geneva consensus and the call between the two presidents.” Lutnick expressed optimism about the handshake agreement between the two largest economies in the world.
Despite these discussions, the American negotiators did not announce any significant changes to Chinese market access for U.S. companies after concluding their talks. Additionally, U.S. Trade Representative Jamieson Greer indicated that there are no upcoming meetings scheduled with Chinese officials. Both Lutnick and Greer refrained from committing to releasing the “framework” agreed upon during the London talks.
These discussions unfolded against a backdrop of accusations from both the U.S. and China regarding violations of a previously established pact that resulted in both countries lowering tariffs by 115% earlier in May. A critical component of this agreement was the easing of export restrictions on rare earth minerals and metals, vital for many everyday products, including batteries and automobile production. The U.S. has repeatedly expressed concern that China was not lifting these restrictions quickly enough.
“They were kind of releasing them, but it was going a lot slower than some companies believed was optimal,” remarked National Economic Council Director Kevin Hassett prior to the trade negotiations.
China currently dominates the global supply of critical rare earth minerals, accounting for over 70% of mining and 90% of refining activities. The Chinese government has also opposed U.S. export controls on student visas, high-end computer chips, and design programs used in artificial intelligence software. Furthermore, China has resisted potential tariffs on jet engines and previously returned a Boeing 737 to the U.S. in protest.
In a statement on CNBC, Lutnick confirmed that the U.S. has clearly communicated to China that it will not be receiving exports of high-powered American semiconductors. “If you want to annoy us, the United States under Donald Trump is strong enough to annoy you back equally,” he added.
China’s Vice Premier He Lifeng, who took part in the London discussions, stated on state TV that the U.S. should adhere to the “hard-won” agreement and show the spirit of good faith. When asked about potential trade agreements in the pipeline, Lutnick mentioned that the U.S. has numerous deals in progress but did not disclose specific details. U.S. officials have echoed this sentiment for over a month, although only one tentative agreement with the U.K. has been reported, which requires further negotiation to become a full-fledged trade deal.
Looking ahead, Lutnick suggested that a deal with the European Union could materialize towards the end of the negotiations. The E.U. represents America's largest trading partner, with the U.S. exporting over $350 billion in goods and $238 billion in services in recent years. The E.U. is also the largest source of U.S. imports, with American purchases exceeding $550 billion in goods and more than $170 billion in services.
As the U.S. Trade Representative's office described the situation, the agreement reached is currently considered a framework in principle, meaning it is not yet formally agreed upon or signed.
