The United States and China ended two-day talks in London, announcing a new effort to get rid of the recent outbreak and resume negotiations planned after the gathering in Geneva last month.
Commerce Secretary Howard Lutnick described the reporter’s agreement as “a framework for implementing the Geneva consensus”, which shows that the gathering was about “negative”. Chinese negotiators provide similar gains to Chinese state media.
Both sides have suggested that this week’s negotiations will accelerate the shipment of rare earth metals that are crucial to us and the world’s supply chains in exchange for some of Washington’s own export controls on semiconductors and other aspects.
But neither side provided details. For now, the clear focus is on dissolving these issues in a bid to open negotiations later on a broader topic, such as tariffs.
Now, the deal will be submitted to reactions from U.S. President Trump and Chinese President Xi Jinping.
Trump posted his reaction on social media Wednesday morning, claiming the deal was completed and would include China’s “front” supply of rare earth minerals and bring Chinese students to American universities.
“We’ve received a total of 55% tariffs,” Trump also said.
He reached that figure by adding 20% blanket tariffs to illegal drugs, 10% benchmark tariffs and other pre-existing responsibilities, with an average tax rate of 25%, but only applies to certain commodities, according to White House aides.
External analysts such as the Yale University Budget Laboratory have calculated that China’s effective tariff rate is 33% higher in all commodities.
Hours after Tuesday night’s unveiling, various market observers all showed that the deal might not have a lot of meat, but at least the relationship is no longer moving in the wrong direction.
Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, Center, were taking a photo with left-wing trade representative Jamieson Greer to focus on trade talks, U.S. Department of Commerce Secretary Howard Lutnick, Chinese Commerce Secretary Wang Wengao, and China’s International Trade Representative and International Trade Representative and London’s Business Secretary in London on June 9 (June 9). ·Reuters/Reuters
AGF Investments’ “Greg Valliere” noted that the negotiations may highlight a comprehensive trade deal, “but at least as negotiations continue throughout the summer, at least relations may not deteriorate.”
Both parties have promised additional negotiations in the coming weeks or months, but no talks have been arranged.
Read more: What Trump’s tariffs mean to the economy and your wallet
Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested that negotiations continue to show China’s leverage: “China is hurting, yes, but they still have the upper hand on key resources and they know how to use them.”
In China, tensions in these mineral resources and any shrinking of free flows will greatly boost the global economy, and China has a huge leverage in these key reserves and processing capabilities, from computers to electric vehicle batteries to medical equipment, the reserves and processing capabilities of these key components.
Similarly, the export control provided by the U.S. will be a major move after a few years of continuous U.S. government leveraging these controls, especially around semiconductor design and manufacturing, because they say they need to be nervous in China for national security reasons.
Wendy Cutler, a former senior U.S. trade negotiator, now writes at the Asian Social Policy Institute (LinkedIn) that any major U.S. move to control exports will be “unprecedented action.”
But overall, Henrietta Treyz of Vedic partner described the rare earth and semiconductor negotiations as possible in the broader market, making a “irrelevant” to the larger tariff issues in the coming months, noting that “no tariffs or in our opinion may be encountered.”
The agreement in Geneva in May reduced U.S. tariffs on Chinese goods from 145% to 30%, and also cut China’s retaliation tax from 125% to 10%.
But the pause took effect for 90 days, leaving the United States and China for about two months to resolve these problems.
Before the negotiations ended, Shehzad Qazi of China Beige proposed in an interview with Yahoo Finance that any agreement would be “a crumbling truce at best.”
Terry Haines of Pangea Policy summed up the market, calling this week’s agreement “tiny.” But Haines believes that any optimism may be short-lived, which predicts “the short-lived market positive because its scope is very limited and the unfinished position is in trouble.”
He added that the market “has seen this patched movie many times”.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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