US-China Trade Deal Finalized: A New Chapter in Global Trade Relations

In a significant development on June 11, 2025, President Donald Trump declared that the United States and China have reached a comprehensive trade agreement, effectively restoring a truce in the ongoing trade war between the two economic giants. This announcement follows intense negotiations in London, building upon a preliminary framework established in Geneva last month.

Key Provisions of the Agreement

The finalized deal encompasses several critical components aimed at easing trade tensions and fostering economic cooperation:

• Tariff Adjustments: The United States will maintain a 55% tariff on Chinese imports, which includes a 10% baseline tariff, a 20% levy on goods related to fentanyl trafficking, and a 25% pre-existing tariff. In contrast, China has agreed to reduce its tariffs on U.S. goods from 125% to 10%.
• Rare Earth Mineral Exports: China has committed to supplying essential rare earth minerals and magnets to the U.S., crucial for industries such as electronics, automotive, and defense.
• Export Restrictions Eased: The United States will ease restrictions on the export of high-tech items to China and will allow continued enrollment of Chinese students in American universities.

Commerce Secretary Howard Lutnick described the agreement as a “handshake for a framework,” awaiting formal approval from both President Trump and Chinese President Xi Jinping before implementation.

Implications for Global Markets

The announcement has had a notable impact on global markets, with investors responding cautiously. While the deal provides a framework for easing trade tensions, underlying disputes in trade policy between the two nations remain unresolved. The World Bank has adjusted its global growth forecast for 2025, citing higher tariffs and heightened uncertainty as significant headwinds for nearly all economies.

Looking Ahead

Both the United States and China have until August 10, 2025, to negotiate a more comprehensive agreement to ease trade tensions. If a more detailed deal is not reached by this deadline, tariff rates are set to revert to previous levels, with U.S. tariffs potentially increasing from about 30% to 145% and Chinese tariffs from 10% to 125%.

As the situation develops, stakeholders worldwide will be closely monitoring the implementation of this agreement and the ongoing negotiations to ensure a balanced and sustainable resolution to the trade conflict.