US-China tariff war: a "deal"! What "deal"?
Trump talks about a trade deal with China, Beijing only talks about a framework. Rare earths, tariffs, export controls - what is really behind the alleged "breakthrough"?
Last week, US President Donald Trump announced an agreement with China in the trade dispute, which was reached after two days of negotiations in London at the beginning of June. This follows the escalation caused by Trump's "Liberation Day" announcement in April, when he raised tariffs on Chinese imports to up to 145%, to which China responded with counter-tariffs of 125% and export controls on rare earths. Trump presented the agreement as a success, particularly in terms of securing supplies of rare earths. China merely confirmed a "framework" for the implementation of previous agreements, which raises questions about the actual progress made.
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Trump's triumphant news
"Just yesterday,” the president said confidently told in a press conference on Thursday, the US and China signed a trade agreement. Trump emphasized that the agreement marks a decisive step towards stabilizing economic relations.
However, the exact content of the agreement remains vague. Trump spoke of a "historic agreement" without giving specific details. His rhetoric aims to convey the impression that the USA is maintaining a strong negotiating position. This fits in with his long-standing strategy of using trade conflicts as leverage for domestic political success.
In any case, the alleged text of the agreement has not yet been published.
US ministers concretize deal with China
While Trump is looking for the big stage, members of the government are filling the gaps with substance. Treasury Secretary Scott Bessent said Friday that the U.S. would impose tariffs of 30 percent on Chinese imports, while China would impose 10 percent on U.S. imports. This announcement, reported by Yahoo Finance, indicates a clear structure to the deal. Bessent emphasized that the U.S. wants to conclude additional trade agreements by Labor Day. This signals an ambitious agenda that goes beyond the China agreement.
Secretary of Commerce Howard Lutnick added that China had agreed to accelerate the supply of rare earths to the USA. In return, the USA would withdraw certain restrictive measures. Lutnick described the agreement as "signed and sealed" in a Bloomberg interview. A White House official confirmed to Reuters that the agreement prioritizes the supply of rare earths, which are critical to U.S. industry, particularly in the technology and defense sectors.
Stephen Miran, chairman of the White House Council of Economic Advisers, emphasized the strategic importance of the agreement. He emphasized that extending a tariff pause makes economic sense for countries negotiating in good faith. This statement, also documented by Yahoo Finance, shows that the US is pursuing a flexible trade policy to reward cooperation.
Framework instead of treaty: China's view of the agreement
In contrast to the triumphant rhetoric of the USA, China is much more reserved. The Chinese Ministry of Commerce confirmed in a statement on Friday that "In the London talks, the two sides reached an agreement in principle on the framework for implementing the heads of state consensus and consolidating the results of the Geneva trade talks". Following these negotiations, there were further close consultations which recently led to the confirmation of the framework details.
China emphasized that it would "review and approve compliant export applications for controlled items", while the US would "lift a series of restrictive measures against China". The Ministry of Commerce emphasized the expectation that both sides will approach each other and develop trade relations in a "healthy, stable and sustainable" manner. However, there is no explicit confirmation of an agreement being signed. Instead, China consistently speaks of a "framework agreement", which indicates a less binding agreement than the US side suggests.
On Saturday, the Ministry of Commerce then responded once again to reports of US negotiations with other countries on tariffs. It condemned the US policy of "so-called 'countermeasures'" as a "unilateral and bullying practice" that undermines multilateral trade. The ministry stated: "Only by resolutely defending the principles can legitimate interests be truly protected." China emphasized that any agreement at the expense of its interests would not be accepted. It threatened to take "resolute countermeasures" to protect its own rights.
Export controls for rare earths remain in place
While the US speaks of promised supplies of rare earths, China merely refers to the examination of export applications within the framework of its laws. In April, in response to Trump's tariffs, the Chinese Ministry of Commerce (MOFCOM) and the General Administration of Customs introduced new export controls for medium and heavy rare earths. Exporters must obtain licenses from MOFCOM to export materials such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, as well as their oxides, alloys, compounds and permanent magnets made from them. This regulation came into force immediately and applies to all countries. The licensing process is time-consuming and takes weeks to months under normal circumstances.
According to the Chinese Ministry of Commerce, there is no commitment under the London Agreement for deliveries to the USA or a "fast track" as agreed with the EU. Instead, it explicitly refers to exports within the framework of the applicable laws.
Representatives of German industry report that China has assured the EU of preferential treatment for export licenses. However, the administration in China works slowly and the application of the laws remains unclear.
Even with accelerated processing, as in the case with the EU, the renewed application for licenses causes considerable delays, simply because a new administrative act has to be processed. The Chinese authorities continue to employ Chinese officials and they tend to work slowly. Companies do have the option of contacting chambers of commerce, industry associations or diplomatic offices that offer support. And the Chinese Ministry of Commerce has also signaled its willingness to help, but an official procedure is still an official procedure and an administrative act takes time.
Trump's announcement that China will start supplying again is therefore optimistic at best. Since Trump has not specified a timeframe for when these deliveries will reach the US, it is not a false statement per se, but it is misleading.
One deal - two opinions
The different narratives of the US and China on the trade framework agreement illustrate the complexity of current trade relations. While President Trump speaks of a "signed treaty" and celebrates a diplomatic success, China merely describes an agreement on a "framework", which suggests a less binding agreement.
There are two possible interpretations. Either Trump is exaggerating his well-known rhetoric in order to score domestic political points, or China has made concessions but played them down out of consideration for its own population and its role in the "Global South". The truth probably lies in the middle.
China will formally maintain its export control policy for rare earths, which has required licenses since April. The licensing process remains time-consuming, but indications point to a possible relaxation in practice. A meeting between the American Chamber of Commerce in China (AmCham) and Chinese Vice Minister of Finance Liao Min on the implementation of the agreement points to talks on practical easing, although neither side released details.
The pressure on both sides is high, as evidenced by the latest economic figures, which show production bottlenecks and rising costs on the American side and falling producer prices and pressure on the export sector as a whole for the Chinese.