The cornerstone of global economic mobility, the U.S.-China business relationship has been the rollercoaster of tariff, talks and strategic stance in 2025. With the coming back to the office of President Donald Trump, business policies have occupied the center level, in which the high-bet tariff increase, a fragile ceasefire and aimed at stabilizing bilateral commerce is aimed at stabilizing. This article discusses the latest developments in the U.S.-China business deal, focuses on tariff, rare earth minerals, visa policies and broad geo-political implications, which provides unique insights into the ongoing saga.
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| US-China trade talks: Tariffs ease, rare earths remain critical |
The Genesis of the 2025 Trade Truce
At the beginning of April 2025, the US imposed 34% "reciprocal tariff" on Chinese imports, which was above 20% "fentanyl Tariff", which increased stress because China has imposed 34% tariff on American items and restricting the export of important rare earth minerals gave By April 11, the American tariff on Chinese import increased by 145%, while China responded at 125%. These tit-for-tat measures put global supply chains in danger, especially for rare earth dependent industries, which reflects the supply of 90% of the world.
On May 12, 2025, Geneva got a success from the business negotiation, where both the nation agreed on 90-day tariff rollback, thereby reducing American tariff 30% and Chinese tariffs up to 10%. This warrior was appreciated by Trump as "Total Reset", which aimed to reduce a business war which had disrupted markets and enhanced the possibility of recession. However, the restoration of the agreement became clear when Trump accused China's violation of a rare earth export license, which caused US steel and aluminum tariff doubled on May 31 to 50%.
Expert insights
China specialist Scott Kennedy mentioned ambiguity in the Geneva Agreement in the Center for Strategic and International Studies: "It is not clear that China has expressed commitment to suspend its rare earth export control or US concessions Failed to achieve." This shortage of clarity has promoted doubts about the long-term of the ceasefire, Kennedy has warned that if the wrong step continues, then the situation of "growing spiral" can be created.
Rare Earth Minerals: The Strategic Flashpoint
Important rare earth minerals for technologies such as electric vehicles, semiconductor and defense systems remain an important link in US-China business stress. Almost monopoly of China - Supply 60% of global rare earth and refine 90% - gives it important benefits. In April 2025, Beijing tightened export restrictions, which led to a threat to American industries such as Ford Motor, who stopped operating due to lack. In the Geneva Cash, China involved the commitment to reduce these restrictions, but the delay in issuing export license gave birth to the non-compliance charges of Trump.
Until 10th June, a framework agreement was a framework agreement as a result of high level talks in London under the leadership of American Commerce Secretary Howard Lutnick and Chinese Deputy Prime Minister O Lifang. China agreed to relax in rare earth and magnet export restrictions for six months, while the US reduced control over the export of jet engine and Chinese students allowed to enter American universities. Trump announced on the Truth Social that this deal has been "complete" for final approval with President Xi Jinping, in which 55% US tariff rate (already present) compared to 10% of China has been maintained.
Statistical reference
- Business Effect: In April 2025, China's import declined by 21% in US imports, while Chinese exports increased by 21% in Southeast Asia, suggesting rerouting to bypass tariffs
- Economic Cost: Yale's Budget Lab estimates that the US families of the middle class from 2025 tariffs of Trump will suffer a loss of $ 2,237 per year, which is less than $ 3,443, because tariff rates are less than expected.
Trump’s Trade Policy: Art of the Deal or Risky Gamble
Traffic structure of Trump emphasizes to reduce US trade deficit with China, which reached $ 295.4 billion in 2024. His strategy - High tariff - to give concessions - has attracted both praise and criticism. Supporters argue that it puts pressure on opening the market on China and curbing unfair practices, while critics like Adam Posen of Pietersen Institute argues that China's control over rare earth gives him "growing dominance" American benefits are limited.
The administration is being seen as a strategy of interaction instead of retracing 30% by reducing tariffs from 145%. On May 30, his intention was highlighted to stabilize China's economy while protecting the economy of China's economy while protecting American interests, saying "Mr. Nice Guy" in Trump Truth Social Post. However, double the steel and aluminum tariff after a few days, it indicates that if the commitments are low then the tariff is preparing to increase.
Dispute Spotlight
The "TACO" (Trump Always Chickens Out) trapped by the columnist of the Financial Times angry trump, who rejected it as a wrong representation of his talk strategy. This dispute underlines the notion that the aggressive tariff threats of Trump can not get proportional concessions, which are questioning the reliability of America in global business.
Chinese Students and Visa Policy: A Surprising Concession
A remarkable result of the London talk was that the US agreed to allow Chinese students to enter US universities, which was an issue in earlier negotiations. This step announced by Trump on June 11, the Chinese student visa is contrary to the restrictions installed earlier, which China had a violation of the Geneva Cylicam Agreement. This decision reflects a balance work: promoting academic exchanges while addressing national security concerns on technology transfer.
Marco Rubio and the Broader US Policy Landscape
Chinese Communist Party's vocal critic Senator Marco Rubio has advocated to reduce American dependence on Chinese supply chains, especially for important minerals. Their impact shapes the comprehensive policy of Trump, which emphasizes the coalition with countries such as Ukraine for domestic rare earth production and alternative supplies. Rubio's stand is in line with efforts to combat the rare earth monopoly of China, although experts warns that there may take years to develop domestic ability.
China’s Perspective: Defiance and Strategic Patience
China has introduced Geneva and London agreements as a victory, and emphasizes its "firm stand in the talks. Government media and influential people argue that the counter-measures of Beijing forced the US to retreat from 145% tariff. The Chinese Commerce Ministry has criticized American export control on AI chips and software, they have called "discriminatory" and the Geneva has urged the compliance of consensus. This statement strengthens China's image as a responsible business partner despite the complaints of "promising fatigue" of the Western countries.
Expert opinion
Janka Oertel of European Council On Foreign Relations, said, "China is now in a psychologist in a strong position, because it seems that America has already pulled back." This perception strengthens China's position in future negotiations, especially when he leaves his rare earth dominance.
Economic and Global Implications
The tariff ceasefire has provided temporary relief, after the Geneva announcement has increased in global markets - Dow has a boom of 2% in futures, and Hong Kong's Hang Seng has increased by 3%. However, Goldman Sachs has warned that tariffs are high (51% America, 32.6% China), if the talks stops by August 2025 then inflation and supply chain interruptions can be promoted. The risk of 35% recession in the US, which was 45% before the ceasefire, but the electronics (above 14%) and clothing (14% up) are expected to increase consumer prices.
Changing the path of export in South East Asia by China reflects its adaptability, which can potentially weaken the US tariff efficacy. Meanwhile, America is exploring the possibility of deal with Europe and Japan to strengthen the Western trade block, which indicates the change towards strategic isolation.
Look forward: an indefinite way
The US-China trade agreement is still in progress, 90-day ceasefire is going to end in the middle of August 2025. The purpose of running talks under the leadership of Treasury Secretary Scott Basant and Chinese Deputy Prime Minister O Lifang is to move forward to the business agreement of 2020, but unresolved issues - currency manipulation, trade imbalance and technology transfer - are still large. The emphasis on the "wonderful conversation" with a sign of optimism, but analysts such as Mark Williams of Capital Economics are suspected on the permanent deal of important concessions.
Key Takeaways
- Tariff mobility: American tariff decreased from 145% to 30%, while tariff was 10% on China, but the underlying stress is still remained.
- Benefits of rare minerals: Regardless of the restrictions, China's control over important minerals has remained a strategic profit.
- Geo political bets: This ceasefire reflects a delicate balance, in which both parties are preparing for potential growth while claiming victory.
As the US and China are dealing with this complex scenario, the result of their talks will shape global business, supply chain and economic stability in the coming years. Stay for updates on the progress of talks and coming closer to August.
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