Trump touts ‘done' deal with Beijing on rare earths, Chinese students
US President Donald Trump has touted 'excellent' ties with China, saying the superpowers reached a deal after two days of talks aimed at preserving a truce in their damaging trade war.
Trump said on his Truth Social platform that China would supply rare earth minerals and magnets – vital elements
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RNZ News
2 hours ago
- RNZ News
Trump's China 'truce' is nothing of the sort
Analysis by David Goldman , CNN Xi Jinping and Donald Trump. Photo: AFP Analysis: At long last, the United States has reached a trade agreement with China. Again. After a testy war of words that escalated into a tit-for-tat restriction on key exports, American and Chinese officials this week met in the United Kingdom with a singular goal: Find a way to agree to what they had agreed to a month earlier in Geneva. It appears the countries' top trade negotiators have accomplished that. On Wednesday (NZT) , both Chinese and Trump officials said they had agreed to a framework to implement the consensus they reached in May, and the trade truce would be sent to their respective leaders for their approval. Businesses, consumers and Wall Street investors will no doubt breathe a sigh of relief: Burdensome tariffs have raised significant anxiety, and easing trade barriers between the world's two largest economies should lower costs and help inject some much-needed certainty into an economy that has been demonstrating some signs of strain. President Donald Trump on Wednesday said in a Truth Social post that a "deal" with China has been completed. "Our deal with China is done," Trump said in his all-caps social media post. Trump said both countries agreed to ease export restrictions, per the prior arrangement agreed upon in Geneva in May. The president also confirmed on Wednesday in his post that the deal included "full magnets, and any necessary rare earths, will be supplied, up front, by China." But in reality, the trade truce - if that's really what was accomplished this time around - is mostly just a return to the already-tense state of affairs from before 2 April. Tariff rates from both countries remain historically high, and significant export restrictions remain in place. The United States has not opened its doors to China's autos, nor is it going to sell its high-end AI chips anytime soon. And, in Trump's parlance, China isn't treating America much more "fairly" after this agreement than it did before. Without a doubt, a trade agreement was much needed. After Trump's 2 April "Liberation Day" announcements, tensions ran so high that trade between the United States and China came to an effective halt. A 145 percent tariff on most Chinese imports made the math impossible for US businesses to buy virtually anything from China, America's second-largest trading partner. US Treasury Secretary Scott Bessent, America's chief negotiator in both trade talks with China, said previous tariff levels were "unsustainable." On 12 May, delegates from China and the United States announced they would significantly roll back their historically high tariffs on one another. Economists pared back their recession forecasts, and moribund consumer confidence rebounded. But Trump and his administration in recent weeks grew increasingly hostile toward China, accusing the country of breaking the promises it made in mid-May. China similarly said the United States failed to live up to its obligations under the Geneva agreement. The Trump administration had expected China to lift restrictions on rare-earth materials that are critical components for a wide range of electronics, but China has only very slowly allowed them to return to the open market, causing intense displeasure inside the Trump administration and prompting a series of export restrictions on US goods to China, three administration officials told CNN last month. China has a virtual monopoly on rare earths, without which cars, jet engines, contrast dye used in MRI machines and some cancer drugs cannot be manufactured. Trump told reporters Friday that Chinese President Xi Jinping had agreed to allow exports of rare earth minerals products to begin, but industry analysts said the crucial materials had not been flowing to the United States as they once had. If both countries satisfy the terms of the agreement this time around, the de-escalation should prevent the direst warnings about the trade war, including potential pandemic-level shortages. Despite the good vibes, the United States and China remain in an economic standoff. The Trump administration - and the Biden administration before it - have maintained that Chinese companies are more than happy to sell inexpensive products to the US market but that China places significant restrictions on US businesses operating in the country and encourages Chinese companies to steal American intellectual property. China has long disputed those claims. Trump, in his first term, raised tariffs on China based on national security concerns. Biden maintained many of those tariffs and doubled down on some. But the second Trump administration has taken trade barriers to an unprecedented level. It has placed a 10 percent universal tariff on virtually all goods coming into the United States. It put in place an additional 20 percent tariff on Chinese goods in an effort to get China to take action to reduce the flow of fentanyl over the US border. Both of those extraordinary tariffs remain in place on most Chinese goods, with the exception of some products like electronics. In addition, the White House closed the so-called de minimis exemption that allowed packages with a value of under $800 (NZ$1381) to come into the United States tariff-free. Hefty new tariffs remain in place on small packages, undermining the business models of Chinese ecommerce giants Shein and Temu. The compounding tariffs create significant trade barriers with America's second-largest trading partner, raising prices for American businesses and consumers with no easy fixes or clear market alternatives. Some gigantic companies, such as Apple, have complex supply chains that can withstand some of the price pressures. But even Apple, which has said it would ship most US iPhones from India as Chinese tariffs rise, said it would face a $900 million quarterly cost increase because of tariffs - at their current levels, not at the sky-high 145 percent rate. Other businesses, such as Boeing, have been completely shut out of China's market. Even without any tariffs or other formal barriers by China on purchases of US aircraft, Boeing has made virtually no sales in China, the world's largest for aircraft purchases, since 2019. But Trump sounded a hopeful note about the path forward. "President XI and I are going to work closely together to open up China to American Trade," Trump said in a post Wednesday morning. "This would be a great WIN for both countries!!!" A trade truce may be better than the alternative - if it lasts this time. But if the deal leads to reduced trade barriers, that could boost both economies. -CNN
National Business Review
2 hours ago
- National Business Review
One survivor reported after Air India crash; UK economy contracts
Ata mārie and welcome to your Friday recap of the main international business and political headlines. In developing news, Al Jazeera reported on the crash of an Air India plane bound for London. It crashed into a medical college in the city of Ahmedabad shortly after takeoff, killing at least 240 people. It was reported that there was one survivor among the passengers. That person was rushed to hospital for treatment. Officials said medical students at the college hostel were among the dead. Air India said it was working with local authorities on the emergency response, while it was still too early to identify the cause of the crash. Boeing, the manufacturer of the 787-8 Dreamliner, said it was in contact with Air India and 'ready to support them'. Elsewhere, China is ready to drop tariffs on imports from 53 African nations, the BBC reported. China has been Africa's largest trading partner for 15 years. Africa's exports to China were worth about US$170 billion in 2023. A joint statement criticised "certain countries' [efforts to] disrupt the existing international economic and trade order" through the unilateral imposition of tariffs, the BBC noted. Yesterday, it was reported that a trade deal between the United States and China had been 'done', according to US President Donald Trump. Reuters reported that negotiators from both sides had agreed on a framework to get a fragile trade truce back on track and remove Chinese export restrictions on rare earth minerals and other critical industry components. Federal Reserve chair Jerome Powell. Meanwhile, pressure between Trump and Federal Reserve chair Jerome Powell intensified after Trump called him a 'numbskull', and repeated a call to cut interest rates, CNBC reported. Trump claimed that lowering rates by two percentage points would save the US US$600b each year. 'We can't get this guy to do it.' 'We're going to spend US$600b a year…because of one numbskull that sits here [and says] 'I don't see enough reason to cut the rates now,'' Trump said. Staying with economics, the UK economy contracted by 0.3% in April, as businesses slashed jobs and shelved investment plans in response to higher taxes and global trade tariff uncertainty, the Guardian reported. Official data showed the economy fell after expanding 0.2% in March and 0.5% in February. The contraction was the worst monthly drop since October 2023. Chancellor Rachel Reeves refused to rule out future tax rises and acknowledged the latest figures were 'clearly disappointing', she told the BBC. 'No chancellor is able to write another four years of Budgets within a first year of government, you know how much uncertainty there is in the world at the moment.' Elon Musk. Over the Ditch, the ABC reported that Tesla drivers had reported 'phantom' braking in autopilot mode, with the electric cars slowing down for no particular reason while driving. Allegations of phantom braking led to legal action overseas and the Australian class action against Tesla was due to return to the Federal Court later this year. Tesla said autopilot mode was designed to make driving safer, but in the US, Tesla was sued over several deadly crashes after the system was enabled, the ABC said. It was reported that Elon Musk's company had settled some cases but not admitted wrongdoing and blamed driver error. About 10,000 Tesla drivers in Australia had registered their interest in a class action against the company, with allegations that consumers were misled over phantom braking, battery range, and self-driving capability, the ABC reported.
RNZ News
3 hours ago
- RNZ News
US dollar dives on Trump's new trade threat
Trump says he will be sending letters within the next two weeks to other countries' governments to announce unilateral US levies on their exports to America. Photo: ANNA MONEYMAKER The US dollar has plunged after US President Donald Trump threatened higher unilateral tariffs on trade partners, and oil see-sawed as traders evaluated the probability behind reports that Israel could be gearing up to strike Iran. Stocks traded mixed on Friday (NZT) as investors navigated the double whammy of returning trade uncertainty and geopolitical volatility, while Boeing's share price slumped sharply in the wake of a deadly 787 Dreamliner crash in India. In New York, investors cheered benign US producer price data and a successful US Treasury auction that sent yields lower. But markets were leery after Trump on Wednesday said he would be sending letters within the next two weeks to other countries' governments to announce unilateral US levies on their exports to America. "This is the deal, you can take it or leave it," Trump told reporters. Investor unease about Trump's trade rhetoric is "causing a little bit of selling," said Jack Ablin of Cresset Capital Management. In the end, the S&P 500 finished up 0.4 percent after a see-saw session. All European stock markets finished lower, except London, which posted an uptick despite official data showing the UK economy shrank more than expected in April. The dollar was down against the euro, and at one point fell by more than one percent to its lowest point in three years against the European single currency. "Trump has done it again. The US president has rattled markets with fresh threats of unilateral tariff rates on several trading partners," said Fawad Razaqzada, market analyst at Markets were also following reports that Israel was poised to launch airstrikes on Iran. Trump called Thursday on Israel not to attack Iran, saying a deal on its nuclear program remained close. But Iran has ramped up rhetorical pressure before upcoming talks, including with a threat to strike American bases in the region if the negotiations break down and conflict erupts. Oil prices, which had initially jumped on Wednesday on the heightened tensions, flipped direction for much Thursday, finishing modestly lower. Back in New York, Boeing dropped nearly five percent after a London-bound Air India plane -- a Boeing 787 -- crashed in Ahmedabad with 242 people aboard. The US planemaker declared itself ready to support Air India following the crash, the first involving a 787 Dreamliner. - AFP
