Trump says U.S. trade "deal with China is done," after tariff talks yield "framework deal"

CBS News

a day ago

London — President Trump declared on Wednesday morning that a U.S. trade "deal with China is done." The U.S. leader offered a few key details of a "framework deal" reached between senior U.S. and Chinese trade representatives in London on Tuesday, but he acknowledged that both he and Chinese President Xi Jinping were both yet to formally sign off on the agreement.
The U.S. and Chinese trade teams wrapped up two days of marathon negotiations in London close to midnight on Tuesday, with the sides saying they had agreed on a new "framework deal" to ease the trade war between the world's two largest economies.
The tension had only increased in recent weeks, despite an agreement reached in Geneva during a first round of talks in May to put the steepest retaliatory tariffs on hold. Those record-high tariffs are due to kick back in on July 9, unless the agreement struck in London is in fact formalized by Trump and Xi.
In month since the Geneva talks, Beijing had cut its exports of critical rare earth elements to the U.S. by half compared to the previous year, and the Trump administration said it would "aggressively revoke" the visas of Chinese students in the U.S. who were found to be linked to the Chinese Communist party.
While the announcement by Mr. Trump's top negotiators on Tuesday evening of an agreed framework was thin on details, the president said in a post on his own Truth Social media platform Wednesday morning that it was "done, subject to final approval with president Xi and me."
He said the deal would see China maintain its current 10% tariffs on goods imported from the U.S., while the U.S. would keep 55% tariffs on Chinese imports.
There was no immediate confirmation from China's government of any terms agreed to in the framework, or whether President Xi intended to sign off on the deal.
In Geneva, Beijing and Washington agreed in May to put their unprecedented tariffs of more than 100% on each other's imports on hold for 90 days. That brought U.S. tariffs on Chinese imports down to their current level of 30% after they briefly soared to around 145%.
Chinese tariffs currently stand at 10%, after hitting 125% before the Geneva round of talks.
Speaking Tuesday, Vice Commerce Minister Li Chenggang, who took part in the talks in London, confirmed the agreement on a framework, "in principle."
On Wednesday, China's state-run media said the delegations had "made new progress," but offered no details.
"The framework deal puts meat on the bones of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs," U.S. Commerce Secretary Howard Lutnick told reporters after the talks in London, which spanned six hours on Monday and then more than 12 hours into the evening on Tuesday.
Lutnick said part of the objective of this week's second round of meetings was just to get "the negativity out" of the bilateral relationship, which had festered since the Geneva talks.
"Now we can go forward to try to do positive trade, growing trade," he said.
The U.S. wants China to resume and increase shipments of rare earths. The materials are vital to industries ranging from weapons and aerospace to electric vehicles and small consumer goods.
On Wednesday, in his all-capital-letter social media post, Mr. Trump said under the agreement reached in London, "full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities."
"Relationship is excellent!" added Mr. Trump.
"At stake is the release of rare earths exports to U.S. manufacturers — stockpiles are dwindling fast — in exchange for aerospace parts and semiconductor programming technology to China," Carl Weinberg, chief economist at High Frequency Economics, told investors in a report. "A 'fail' would raise the risk of auto and aircraft production grinding to a halt as soon as next month. If that happens, economic growth will be severely dented for an unknown term."