The US and China have announced a ‘truce’ in their tariff war, with both sides confirming that an agreement on critical minerals and export controls was signed this week. The news comes as US president Donald Trump hinted that more deals could be reached ahead of the 9 July tariff deadline.
“We just signed with China yesterday,” Trump told a rally last night (26 June), without providing any additional details.
“The China deal, we are starting to open up China, things that never really could have happened.”
A White House official later clarified that both sides had agreed to an “an additional understanding of a framework to implement the Geneva agreement.”
A statement released by China’s commerce ministry today (27 June) confirmed an agreement had been reached.
Details
Howard Lutnick, the US commerce secretary, told Bloomberg TV that the deal had been “signed and sealed two days ago”.
The Chinese commerce ministry said that the US will approve certain export applications for controlled goods and reduce “restrictive measures” taken against China.
In return, the US will receive rare earth minerals that had been effectively blocked from the US by Beijing.
Lutnick told Bloomberg TV that “they’re going to deliver rare earths to us” and once they do that “we’ll take down our countermeasures”.
Background
An agreement was signed between China and the US in Geneva on 12 May, with later talks taking place in London about how to implement the deal.
The Geneva agreement included a reduction in tariffs, but did not resolve disputes over US export controls and China’s control of critical minerals.
The announcement brought to an end weeks of escalating tariff rates between Washington and Beijing, but failure to resolve other issues later led to a social media eruption from Trump.
India next?
The ‘truce’ comes as the Trump administration works to reach deals with other nations ahead of a self-imposed deadline of 9 July. After this date, higher tariffs on all nations will come into effect.
So far, only the UK has signed an agreement.
At last night’s rally, Trump hinted that India could be the next major deal announced, promising to “open up India”.
“Everybody wants to make a deal.”
Talks have been ongoing with the EU, India, South Korea and Japan, among others, ahead of this tariff deadline.
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