Donald Trump says he’s finally cracked a tentative deal with China—but why doesn’t it sound any good?
Trump announced on Truth Social Wednesday morning that a long-awaited trade deal had finally materialized, though it was still subject to “final approval” by Chinese President Xi Jinping and himself, and indicated that the U.S. would impose a 55 percent tariff on Chinese goods, while China would impose a 10 percent tariff.
While these numbers are significant deescalations from the whopping 145 percent tariff Trump had levied on Chinese exports and the 125 percent tariff rate on U.S. exports China imposed in response, Trump’s deal still leaves something to be desired.
Before Trump entered office, China and the U.S. both had roughly 20 percent tariffs on exports from each other’s countries. In an initial agreement last month, the U.S. had agreed to lower rates to 30 percent and China had lowered to 10 percent, before Trump blew up the deal.
So while the U.S. will still have to pay more for Chinese goods—a policy that will ultimately raise prices for American consumers—it seems that China has struck a deal to pay even less for American goods than it did before Trump was in office.
Meanwhile the other terms of that deal seemed to provide assets both countries had before Trump’s ridiculous trade war.
“FULL MAGNETS, AND ANY NECESSARY RARE EARTHS WILL BE SUPPLIED, UP FRONT, BY CHINA,” Trump wrote.
China’s grip on rare earths had provided it with a lot of leverage in negotiations with the United States. When Trump first levied his astronomically high tariffs on China, Beijing essentially shut down exports, and even after it agreed to a truce, in Geneva last month, Beijing still required companies to purchase special licenses to buy them, placing a particular strain on robotics and defense companies.
In return for resuming the supply of rare earths, the U.S. would allow Chinese students to attend American universities. Secretary of State Marco Rubio announced late last month that he would begin “aggressively” revoking the student visas of Chinese students, claiming concerns over national security. As one could probably assume, the purported threat posed by these students was never real but a bargaining chip for the Trump administration.
Trump noted that allowing Chinese students to study at American universities has “ALWAYS BEEN GOOD WITH ME!”
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