Washington, DC [US], June 12 (ANI): The United States and China have reached a fresh trade agreement, reviving the framework hammered out in Geneva last month, in a bid to stabilize deteriorating economic ties after months of mounting tensions. The deal, confirmed Tuesday night by top trade negotiators from both nations, now awaits final approval from the respective heads of state, according to CNN.
The new agreement brings a temporary truce that has calmed global markets, businesses, and consumers shaken by an escalating trade war and policy unpredictability. Despite the announcement, significant hurdles remain, including record-high tariffs and continuing export restrictions.
President Donald Trump took to Truth Social on Wednesday to declare, “Our deal with China is done,” stating that Beijing has agreed to deliver “full magnets and any necessary rare earths…up front” in accordance with the Geneva framework.
However, the deal does not fully resolve long-standing tensions. Tariff levels remain historically high, and the US continues to restrict imports of Chinese electric vehicles, AI chips, and other high-tech goods. Industry experts noted to CNN that the truce essentially resets relations to pre-April 2 conditions, rather than achieving structural breakthroughs.
Trump’s “Liberation Day” announcement in April imposed a sweeping 145% tariff on most Chinese imports, effectively freezing trade between the two nations. US Treasury Secretary Scott Bessent, who led negotiations, has since acknowledged that the tariffs were “unsustainable.” On May 12, both countries agreed to scale back select duties, offering markets a modest reprieve and easing recession concerns.
Despite that step forward, compliance issues quickly surfaced. Trump administration officials accused China of stalling rare earth shipments critical for electronics and defense industries, while Beijing alleged that Washington was failing to fulfill its side of the Geneva accord.
Economic analysts said that rare earth exports from China have yet to return to normal levels, despite Chinese President Xi Jinping’s pledges during bilateral talks. The fragile trust continues to impede full-scale recovery in trade flows.
In the backdrop, the Trump administration has implemented several new trade barriers, including a 10% universal tariff, a 20% surcharge on Chinese goods linked to fentanyl concerns, and elimination of the de minimis exemption on imports under $800—a move that has directly impacted Chinese e-commerce giants like Shein and Temu.
Major US companies are also feeling the pressure. Apple expects a $900 million quarterly cost increase due to the current tariff structure, while Boeing has virtually lost its foothold in the Chinese aviation market since 2019, despite no formal restrictions.
Still, Trump projected optimism, stating: “President XI and I are going to work closely together to open up China to American trade. This could be a great WIN for both countries.”
Responding to Trump’s announcement, Chinese Foreign Ministry spokesperson Lin Jian emphasized that the trade meeting followed the strategic guidance of both heads of state. He confirmed that the sides had reached “a consensus in principle” on implementing the agreements discussed in their June 5 phone call, and would move forward to consolidate the results of the Geneva negotiations.
Lin further stated: “China always honours its commitments with concrete actions… It is hoped that the US will work with China to implement the consensus reached, reduce misunderstandings, and strengthen cooperation through communication and dialogue.”
As the global economy continues to navigate rising geopolitical risks and protectionist policies, the revived deal marks a cautious step forward—but one shadowed by deep-seated distrust and unresolved issues. (ANI)
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