Trade Tangle Unraveled: China withholds tariff agreement details with US
United States and China remain silent on specifics regarding their customs accord.
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After US President Donald Trump's declaration of a deal to relieve export limitations in the lingering trade squabble, China remains silent. Foreign Ministry spokesman Lin Jian in Beijing indicated progress in dealing with economic and trade concerns voiced by both parties. The People's Republic hopes that both parties can work harmoniously to implement the accord.
Concerning the processing of rare earths, where China stands as a substantial global player, a representative from the Ministry of Commerce in Beijing specifies that the nation will review export permits lawfully. Beijing has already authorized some permits and intends to fortify the authorization process.
Trump announced an arrangement between the two parties on his Truth Social platform concerning rare earth exports. According to Trump, China has accepted to supply specific raw materials to the US. In exchange, Washington plans to allow Chinese students to continue studying at US universities.
Trump also revealed an agreement between the two heavyweight economies on tariffs. The tariffs for Chinese imports into the US would be set at 55 percent, asserts Trump. In response, China would impose retaliatory duties of 10 percent on goods from the US, claims Trump. Diplomats from both countries met on a neutral ground in London on Monday and Tuesday. Afterward, envoys from Beijing and Washington expressed their intentions to execute the accord from the meeting in Geneva in mid-May.
In Switzerland, China and the US reached a consensus in Geneva at that time to reduce their mutual import tariffs by 115 percentage points each and granted each other a 90-day time-out for more negotiations. The fine print of the Geneva agreement and the London understanding remains elusive. US Trade Minister Howard Lutnick suggested in London that a written version of the package would not be published. Some analysts commented that the negotiations did not denote progress, but merely a return to the situation of a few months ago.
Insight:
These recent agreements between China and the United States in Geneva and London represent the most recent installments in their ongoing efforts to control their trade dispute and attain a stable economic relationship.
Geneva Agreement:
The Geneva agreement materialized in May following high-level diplomatic exchanges. Notable aspects of the agreement consist of:
- Tariff Recess: Both sides agreed to a 90-day pause on most of the 100%-plus tariffs that they had levied on each other. This measure was intended to halt the intensification of the trade war, which had raised concerns about a potential global economic downturn.
- Negotiation Structure: The agreement established a framework to facilitate ongoing trade negotiations. The ultimate goal was to address underlying issues such as unfair trade practices, excess capacity, transshipment, and fentanyl.
- Tactical Truce: While specific details on what would be discussed during this period were not fully disclosed, the pause in tariffs was meant to provide a venue for substantive dialogues.
- Flimsiness: The agreement was fragile, as demonstrated by subsequent US actions—such as new restrictions on Huawei and threats to revoke visas for Chinese students—that undermined the truce and led to retaliatory measures from China, such as delays in rare earth exports.
London Understanding:
The London understanding pertains to the framework agreement reached in June following two days of high-level discussions (June 10–11, 2025) between top officials from both nations. Key points consist of:
- Framework Agreement: The two sides agreed "in principle" to a framework aimed at implementing the agreements made in Geneva and subsequent bilateral discussions. The specific terms of this framework have not been publicly divulged, but it signifies a commitment to resolving their trade disputes.
- Dialogue Commitment: Both countries emphasized a professional and constructive atmosphere during the talks. The framework is seen as a crucial step toward reducing tensions and restoring predictability in global trade.
- Emphasis on Core Issues: The London discussions aimed to build on the Geneva agreement by focusing on enduring disagreements, including technology exports (specifically advanced semiconductors), rare earth minerals, and visa restrictions for Chinese students in the US. One reported understanding is that China may speed up rare earth export licenses, while the US may lift some technology restrictions on China.
- Broader Implications: The agreement is expected to have significant implications for global trade, as both nations are significant economic powers. The framework aims to transform the truce into tangible actions, but formidable obstacles and mutual distrust persist.
Summary Table:
| Agreement/Understanding | Key Features | Status/Context ||------------------------|--------------|----------------|| Geneva Agreement | 90-day pause on most 100%+ tariffs; negotiation framework established; temporary truce | Fragile, undermined by subsequent retaliatory measures || London Understanding | Framework "in principle" to implement Geneva agreement; focus on technology, rare earths, and visas; not all details disclosed | Next step in negotiations; commitment to dialogue, but obstacles remain |
The community and employment policies of both the United States and China may need to address the implications of the Geneva and London understandings, which aim to reduce tariffs and resolve trade disputes. The finance sector, particularly the businesses involved in trade, should stay informed about these agreements and their potential impacts on export-import operations. Meanwhile, the political implications and general-news responses to these agreements should also be monitored closely in light of the ongoing trade tensions between the two nations.
