President Donald J. Trump, The 47th President of the United States, announced today that a long-anticipated trade agreement with China has been finalized, pending formal approval in a joint meeting with Chinese President Xi Jinping.
Making the announcement on his official social media account, Trump stated:
“OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA.”
Tariff Cycle 2.0: The Trade War Returns
Trade tensions between the U.S. and China reignited in early 2025 after Washington imposed a new round of export restrictions on Chinese tech firms, citing national security concerns. In retaliation, Beijing targeted U.S. exports including soybeans, energy products, and education services with steep tariffs.
The dispute escalated in March and April with tit-for-tat tariff hikes. The U.S. raised duties on Chinese industrial goods to an average of 55%, while China responded with a 10% tariff on American consumer products and education-linked services.
Despite the conflict, backchannel diplomacy remained active. Trump known for his direct, personal approach stepped in to take a visible role in the negotiations, culminating in today’s announcement.
Deal Highlights
Rare Earth Supply: China has agreed to supply “full magnets and any necessary rare earths” in advance. These materials are essential to U.S. defense, energy, and tech industries and have previously been subject to Chinese export restrictions.
Education and Mobility: In a notable policy shift, the deal includes a reopening of U.S. colleges and universities to Chinese students. Trump remarked, “CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!),” suggesting a more favorable stance on academic exchange.
Tariff Terms: The U.S. will maintain its elevated 55% tariffs on a wide array of Chinese imports, while China will impose a comparatively lighter 10% duty on American goods. This structure appears to favor U.S. leverage in the deal.
Pending Approval: Trump emphasized that the agreement is not yet final and is “subject to final approval with President Xi and me,” indicating a likely summit or ceremonial signing event in the near future.
A Softer Tone
The tone of Trump’s message marks a shift from previous confrontational rhetoric. His statement, “RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!” points to an effort to reset the narrative and stabilize the U.S.–China relationship ahead of upcoming global economic forums.
Market and Political Reaction
Markets responded positively. The Dow Jones Industrial Average surged over 500 points, with gains led by rare earth mining companies and U.S. education-related ETFs. Analysts noted the agreement could bolster confidence in higher education and critical tech supply chains.
Political responses in Washington were mixed. Some lawmakers praised the deal for securing vital materials and reestablishing educational exchange. Others voiced concerns about the high U.S. tariffs, warning they could raise costs for consumers.
What’s Next
While full details have yet to be publicly released by either Washington or Beijing, insiders suggest a Trump Xi summit could take place as early as July. If finalized, the deal could redefine Trump’s trade policy legacy and open a new chapter in U.S. China economic relations.
