On Sunday, National Economic Council Director Kevin Hassett expressed optimism regarding a potential trade deal between the United States and China. Following a meeting scheduled for Monday in London, Hassett stated he is “very comfortable” with the progress being made. His remarks were made during an appearance on CBS’ “Face the Nation,” coinciding with President Donald Trump's recent comments about having a “very good” conversation with Chinese leader Xi Jinping. According to Trump, discussions with China are “very far advanced,” signaling a potential resolution to ongoing trade tensions.
One of the key focuses of the negotiations is the restoration of the flow of rare earth minerals, which are crucial for the manufacturing of electronics. These minerals had been disrupted since the escalation of the US-China trade war in early April. Hassett noted, “Those exports of critical minerals have been getting released at a rate that is higher than it was, but not as high as we believe we agreed to in Geneva.” The goal is to return to pre-trade war levels of exportation, which is vital for various industries reliant on these materials.
The negotiations in London will be led by Commerce Secretary Howard Lutnick, along with Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer. Greer had previously led trade talks in Geneva, which had aimed to dial back the escalating trade conflict. However, tensions flared after Trump accused China of “totally violating” a 90-day trade agreement that had temporarily eased tariffs on both sides.
Under the terms of the previous agreement, the United States reduced its overall tariffs on Chinese goods from 145% to 30%, while China lowered its tariffs on American imports from 125% to 10%. Additionally, China committed to suspending non-tariff countermeasures against the US. However, Beijing's retaliatory measures included export restrictions on essential rare earth minerals, which are integral components in high-tech products such as iPhones, electric vehicles, and fighter jets.
In early April, the Trump administration imposed broad “reciprocal” tariffs on numerous trading partners before pausing them for a 90-day period. Hassett did not provide specifics on what the baseline tariffs might be going forward but emphasized that there would be some tariffs in place. Lutnick previously indicated that “we will not go below 10%” for the foreseeable future. As negotiations continue, there remains uncertainty about how these tariffs may affect businesses and the overall economy.
Despite the administration's assurances that other countries, particularly China, would bear the burden of tariffs, businesses and economists have expressed concerns about the potential impact on consumer spending and the looming threat of a recession. Recent data indicates that US inflation has slowed to its lowest rate in over four years, with the annual inflation rate decreasing from 2.4% in March to 2.3% in April, according to the Consumer Price Index.
Hassett highlighted that the administration's policies are aimed at reducing inflation and the federal deficit by generating revenue from international trade. The Treasury Department reported a record $16.3 billion in gross customs duties collected in April, a significant increase from $8.75 billion in March. Since the start of the 2025 fiscal year in October 2024, the US has garnered approximately $63.3 billion in gross customs duties, marking a more than $15 billion increase compared to the same period in the previous fiscal year. The Congressional Budget Office estimates that without considering the economic effects, increased tariff revenue could reduce total deficits by $3 trillion over the next decade.
