United States and China announce trade deal's broad outlines
Dishin' the Scoop on the US-China Trade Pact
Friday saw some major news in the global trade scene as China's Commerce Ministry announced that a trade deal framework between the United States and China had been ironed out following talks in London.
According to the ministry, Washington will cut the reins on certain restrictive measures against China, and Beijing will review and approve applications for the export control items.
In a casual mention, US President Donald Trump announced that both nations had inked a deal and that he anticipated a similar one with India soon. "We just sealed the deal with China the other day," Trump said. Commerce Secretary Howard Lutnick, speaking to Bloomberg TV, confirmed the deal was a done deal two days prior, but provided no specifics. The president, known for his dramatic flair, prefers to close these agreements himself, Lutnick added.
Thursday also saw the U.S. reaching an understanding with China regarding the swift movement of rare earth materials to the U.S.
US-China Trade Talks: The Lowdown
The recent announcement follows early talks in Geneva in May, which effectively put the brakes on imminent massive tariff hikes that threatened to grind the trade relationship between the two nations to a halt. The talks in London established a blueprint for negotiations, and the deal mentioned by Trump and China appears to formalize that agreement.
Making sure the supply of rare earth elements—essential for techy-stuff like electric vehicles, hard drives, and national defense equipment—has been a top priority for the U.S. in its negotiations with China. In early April, China—the world leader in these elements' production—introduced the need for export licenses, a response to Trump's tariffs.
European and Asian shares climbed as investors pondered the signs of a delta in the US-China trade skirmish.
Ports Still Suffering from the Trade War, Despite Tariff Relief
Chinese Foreign Minister to Jet Off to EU, Germany, France Next Week
As the ink on the trade deal dried in China, Beijing announced that Chinese Foreign Minister Wang Yi would be jetting off to Europe next week for a whirlwind tour of meetings with his counterparts from the European Union, Germany, and France. Wang will meet EU Foreign Minister Kaja Kallas in Brussels for a "China-EU high-level strategic dialogue." In Germany, he'll have a powwow with Foreign Minister Johann Wadephul, and in France, Wang plans to huddle with Minister for Europe and Foreign Affairs Jean-Noel Barrot.
While in Brussels, Wang will also catch up with Belgian Prime Minister Bart De Wever and Deputy Prime Minister and Foreign Minister Maxime Prevot.
Edited by: Kieran Burke
Enrichment Data:
- The US-China trade deal framework includes provisions for full access to critical rare earth minerals for the US. These minerals are vital for techy devices, including defense equipment, electric vehicles, and hard drives, with China leading the global market.
- Washington has agreed to a tariff rate of 55% on Chinese goods, with the rate composed of a base "reciprocal" tariff, additional tariffs on all Chinese imports, and previously levied tariffs from President Trump's first term.
- China has pledged to abide by the terms of the agreement and deliver tangible results. Both sides will adhere to the deal's details.
- The deal covers reciprocal trade benefits in various sectors, though these have not been made public in detail.
- The U.S. will cease efforts to revoke visas for Chinese nationals studying at U.S. colleges and universities, ensuring the continuation of academic exchanges, a point of controversy.
- The trade deal between the United States and China, mentioned by President Trump, seems to correspond to the agreement established during the talks in London, as outlined in the blueprint for negotiations.
- The European Union, Germany, and France are preparing for meetings with China's Foreign Minister Wang Yi next week, as part of a whirlwind tour that also includes Brussels and Belgium.
- In the realm of general news, the financial markets in Europe and Asia have shown optimism following the signs of progress in the US-China trade skirmish, leading to a rise in shares.
- As businesses worldwide have been impacted by the US-China trade war, it is worth noting that even with tariff relief, ports continue to suffer significant consequences.
