US–China trade deal is 'temporary ceasefire,' not an agreement

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Bill Reinsch, Center for Strategic International Studies (CSIS) senior adviser, joins Asking for a Trend with Josh Lipton to discuss President Trump's trade deal with China, calling it more of a "ceasefire" than an agreement.
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President Trump saying today that China will supply rare earth minerals upfront to the US. This coming as part of a larger trade agreement between the two countries. But our next guest says this is more of a ceasefire than an agreement that moves the ball forward. For more, we're bringing in now Bill Reinsch, senior advisor at the Center for Strategic and International Studies. Bill, it is good to see you. So President Trump did make news this morning. Bill goes on social media. He says, "Listen, we got a, got a new effort in place, got a new framework in place so we can get back to negotiations." What, what do you make of what you heard, Bill?
Well, it's hard to tell because there's a pattern here, which is you announce the agreement, you declare victory, and then you supply the details later, uh, and when nobody's paying attention. So it's hard to say what is actually in it. It appears to be basically a temporary ceasefire that takes us back to Geneva a month ago and both countries promise to do what they said they were going to do then. Uh, it looks like tariffs are going to stay what they were then. Uh, the two trade-offs that have been mentioned, uh, by Trump and by, uh, Commerce Secretary Rossnik at various points today were one, they're going to export, uh, more industrial magnets and we're going to let their students come into the United States, uh, which really takes us back several months to the status quo ante. And the other one that's actually that I think the most interesting is they're going to export more rare earths, uh, and we're
going to, uh, remove some of our recent export controls. And that's of course, is the mystery to be decided, which export controls are going to be removed and to what extent, which is really important. And second, which earth or rare earths are they going to export and to what extent, uh, because they have a, have structured a very complicated export control regime of their own, and, you know, is this going to be everything, or a few things, and at scale, or in smaller quantities? And we don't have answers to any of that.
Bill, who broke the original truce there, broke it in Geneva because as you were calling, there's a lot of barbs being traded back and forth. US said one thing, China said another. What is your sense?
Well, um, I think what's happened, I've been talking to colleagues here as as well and coincidentally talked to someone who's, uh, based in, an American who, uh, is based in China and was happened to be visiting today. Uh, and it sounds like what happened is the China figured out belatedly that they've got leverage, you know, and that, uh, Trump in this case doesn't hold all the cards. Uh, and the Chinese hold a big one, which is, uh, export stuff that we need, uh, rare earths and, and, uh, some industrial products magnets, small industrial magnets being one, which are very important for automobile industry and some other high-tech products. Um, they really have right now effectively a monopoly on that. Uh, and, uh, we can do something about it, but it'll take a long time. So they've got leverage, uh, and I think what we're seeing this time around is they used it. Uh, and they used it to, uh, get what they wanted, which is some easing of US export controls, uh, and, uh, getting their students back here, which is, I hadn't realized, but apparently is, is, uh, is an important thing for them.
And, and Bill, we talk about leverage and, and listen, I get it. We need those rare earths, but don't we have leverage too as well, Bill? I mean, how much of those Chinese consumers and exporters feel the pressure from those elevated tariffs?
Well, that's a, that's a good question and it's a little bit of a mystery. The assumption, I think the Trump assumption going in was that we had a lot of leverage because their economy was not in great shape and that we are a huge buyer of their products. And if we stopped doing that because of the tariffs, uh, they would be in serious, even more serious trouble. And we, that would give us some leverage. I think this turned out to be less than we thought. Um, it's not a democracy, the Chinese don't have to worry about public opinion in quite the same way that that we do. And they've been able to, uh, I think manage the economy, uh, not, you know, beautifully, but they've been able to, uh, uh, stave off some of the disasters that I think that the Trump people were predicting. So, I wouldn't say we have no leverage, but I think at the moment, uh, it turns out that we seem to have less than the Chinese do.