US and China Reach Trade Deal, Awaiting Signatures

Updated June 11, 2025

A trade deal between the United States and China is complete and awaits the signatures of President Donald Trump and Chinese President Xi Jinping, according to ‍the White House. Trump is reviewing the details of the agreement, which follows trade talks⁣ in London and ‍Geneva.

Commerce Secretary Howard Lutnick said the deal establishes a framework to implement the geneva ‍consensus and a call between the two ⁢presidents. A key component involves⁣ China‍ supplying the US with rare earth elements, crucial for the auto, semiconductor, and smartphone industries. China controls a significant portion of the ⁢rare earth market, producing 60% of the world’s minerals and processing ‍nearly⁤ 90%.

The ⁤agreement also addresses tariffs. The US will impose 55% tariffs on Chinese goods, a decrease from 145%. In return, China will levy ⁣a 10% tariff‍ on US imports, down from 125%. The US tariff includes a 10% baseline tariff, currently under legal review, along with tariffs from‍ Trump’s first term and those related to alleged fentanyl trafficking.

While the White House‍ views the deal‍ as a victory, some experts argue that‍ tariffs ⁤ultimately burden US businesses and consumers. Retailers like Walmart have warned of potential price increases due to the tariffs. Doug McMillon,Walmart CEO,noted the difficulty ⁤in absorbing the tariff pressure given narrow retail margins.

“Given the ⁢magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins.”

The Main Street Alliance,⁢ representing⁢ small business interests, expressed concerns, calling the deal a “death sentance” for businesses sourcing from China. Cassie ⁤Abel, founder of Wild Rye, echoed these concerns, stating that the 55% tariffs remain “insane.” She highlighted challenges in‍ securing shipping containers due to anticipatory spending and orders related to previous tariffs.

“It is devastating, 55 percent tariffs are still insane.”

The agreement also allows Chinese students to continue attending US universities.⁤ Lutnick indicated that US tariffs on China will take effect next⁤ week, though some⁣ analysts believe this may be a negotiating tactic. Dan Ives,an analyst at ⁢Wedbush Securities,anticipates further industry-specific exemptions. Adam S Hersch, senior economist at⁢ the Economic Policy Institute, believes the deal postpones deeper disagreements.

Global markets reacted positively, with indexes in London, Tokyo, Hong Kong, and Shanghai rising. US markets remained relatively flat, balancing trade news optimism with new inflation ⁢data. Consumer prices increased by 0.1%, reflecting subdued inflation and reduced consumer spending.

what’s next

Analysts expect continued negotiations and‍ potential industry-specific exemptions in the coming months as the US and China navigate the complexities of the new ⁤trade agreement.