🇺🇸🇨🇳 U.S. & China Strike Short-Term Deal On Trade, Rare Earth Minerals
The world’s two largest economies appear to be cooling trade tensions — for now.
President Trump called his face-to-face meeting Thursday with Chinese President Xi Jinping a huge success, saying the U.S. will lower tariffs on China from 57% to 47%.
Earlier this year, Trump raised tariffs as punishment for China’s role in the fentanyl supply chain.
“I guess on the scale from 0 to 10, with ten being the best, I would say the meeting was a 12,” Trump said speaking to reporters aboard Air Force One.
While the trade war may be cooling, talk of nuclear weapons is heating up. More ⬇️
U.S.-CHINA BREAKTHROUGH
Trump said that the U.S. would lower certain tariffs on Chinese goods from 20% to 10%. Those were implemented earlier this year as punishment on China for selling chemicals used to make fentanyl. With that 10% relief, the total combined tariff rate on China would go from 57% to 47%.
When Trump took office, the the average of all U.S. tariffs on China was at about 20%. Analysts say companies may still feel compelled to move operations out of China, given that tariffs are still up more than 2x from early 2025.
🇨🇳 China agreed to suspend export controls on rare earth minerals (used in tech products like electric vehicles and smartphones). Trump also says China agreed to purchase “massive” amounts of soybeans, which was a major concern for U.S. farmers after China stopped buying them earlier this spring as part of the trade war.
Treasury Secretary Scott Bessent told the Fox Business Network that China agreed to buy 12 million metric tons of soybeans before the end of this year and 25 million tons per year for the following three. “So you know, our great soybean farmers, who the Chinese used as political pawns, that’s off the table, and they should prosper in the years to come,” he said.
🇺🇸 The U.S. will allow some chip and semiconductor exports to China. Notably absent from the talks: TikTok’s future, China purchasing Russian oil, and maintaining Taiwan’s independence.
What this means: The one-year truce announced is expected to stabilize — not solve — U.S.-China tensions. It allows both sides to buy time to reduce dependence on each other in key sectors. It also underscored how much stronger China has grown since Trump’s first term, Bloomberg analysts note.
“China gave some ground, but the clear dynamic is how Chinese threats have gotten the U.S. to back off a series of proposed restrictions,” said Scott Kennedy, senior adviser at the Center for Strategic and International Studies. “Xi has created more safe space for China’s economic system and its efforts to achieve greater global leadership.”
GOING NUCLEAR
Just minutes before sitting down with Xi, Trump wrote on Truth Social that due to recent actions by Russia and China, he had ordered the Department of War to “start testing our Nuclear Weapons on an equal basis.”
Three decades in the making: China has expanded its nuclear arsenal in recent years, faster than any nation on earth, though it has not conducted a nuclear test since 1996. The U.S. has observed a similar moratorium on tests since 1992, despite never formally ratifying the global ban on tests. Russia has not conducted a confirmed nuclear weapon test since 1990, when it was the Soviet Union.
The twist: Russia and China, however, have recently stepped up displays and tests of some weapons capabilities that could carry nuclear warheads. In recent days, President Vladimir Putin announced Russia had successfully tested a nuclear-powered, nuclear-capable cruise missile and separately, the Poseidon nuclear torpedo — a drone designed to travel thousands of miles underwater to strike coastal targets. Neither test involved an actual nuclear bomb.
In response to Trump’s announcement, the Kremlin on Thursday said the recent test “certainly cannot be viewed as nuclear testing at all,” but it would do so if the U.S. does. Trump did not clarify whether that meant new detonations or demonstrations of unarmed nuclear-capable missiles or undersea systems, which the U.S. already conducts regularly.