Trump says US-China trade deal reached, awaits nod

US President Donald Trump has announced a tentative trade agreement with China, resolving key issues such as rare earth supplies and student exchanges. The deal still awaits final approval from both Trump and Chinese President Xi Jinping.

What’s in the Deal: Rare earths, student visas and tariffs

Trump stated that China has agreed to resume supplying essential magnets and rare earth materials to the US. In return, the US will allow Chinese students to continue studying at American colleges and universities. The deal is described by Trump as “done” but “subject to final approval” from both leaders.

“We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent!” Trump wrote on Truth Social. He also confirmed China will provide rare earths “up front,” while the US will fulfill agreed terms, including student access to American education institutions.

Background: Trade war reignited since Trump’s second inauguration

Since Trump’s second inauguration in January 2025, US-China trade tensions escalated sharply. Trump’s new “Liberation Day” tariffs added another 34% to existing tariffs, bringing the total to 54% on Chinese imports. In response, China imposed equivalent tariffs and additional export controls on rare earth elements.
Tariff levels on both sides peaked at 125%, causing significant disruptions in global supply chains and raising economic uncertainty.

US President Donald Trump | Credit: X

Rare earths: The strategic flashpoint

Rare earth elements, crucial for sectors like defence, semiconductors, and electric vehicles, became central to the dispute. With China controlling nearly 90% of global supply and refining capacity, its early 2025 move to tighten export licensing had serious effects.

Major US manufacturers such as Ford faced production halts due to rare earth shortages. The new agreement aims to resolve this by restoring rare earth supplies, which US Commerce Secretary Howard Lutnick believes will help stabilize trade relations.

Student exchanges: A key link maintained

The deal also preserves student exchange opportunities, allowing Chinese students to continue their education in the US. This aspect of the deal is seen as vital for maintaining people-to-people ties.

Chinese students account for one of the largest groups of international students in the US, contributing approximately $14 billion annually through tuition and expenses.

In the past, both governments have supported education programs to enhance mutual understanding. With increasing visa issues and political tensions, this part of the agreement is seen as a stabilising step for long-term diplomatic relations.

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