US-China Trade Deal: Temporary Thaw in a High-Stakes Standoff
China-US trade talk negotiations in London (Image Chinese embassy in the UK)
US-China Trade Deal Cuts Tariffs, Signals 90-Day Truce to Ease Global Economic Tensions
By S JHA
NEW DELHI, June 11, 2025 – The United States and China announced a trade deal following two days of negotiations in London, marking a tentative pause in their escalating trade war. The agreement, which reduces US tariffs on Chinese imports from 145% to 55% and China’s retaliatory tariffs from 125% to 10% for a 90-day period, aims to stabilize global markets amid fears of economic fallout.
However, the deal’s vague framework, coupled with conflicting narratives from both sides, raises doubts about its durability and underlying intentions. With domestic pressures mounting and geopolitical tensions simmering, this truce appears more as a strategic maneuver than a resolution to deep-seated trade disputes.
US President Donald Trump heralded the deal as a decisive victory, posting on Truth Social: “Our deal with China is done, subject to final approval from President Xi and me.”
He further claimed that “full magnets, and any necessary rare earths, will be supploed, upfront by China.”
Trump sought to position the agreement as a win for US industries reliant on critical minerals. But Trump’s accusation that China is “totally violating its agreement with us” shortly after the announcement suggests underlying tensions and potential fragility in the deal.
The New York Times reported that the London talks “did not appear to yield any meaningful concessions beyond an agreement to continue discussions,” noting that the tariff rollback was partly driven by pressure from US businesses facing supply chain disruptions. It stressed on the deal’s establishment of a “consultation mechanism” but questioned its ability to address core issues like China’s trade surplus or intellectual property theft.
Similarly, The Washington Post emphasized that the deal aims to keep the Geneva trade truce on track, with Howard Lutnick, a key negotiator, stating it should resolve curbs on rare earth minerals and magnets. However, CBS News reported Trump’s frustration over China’s alleged non-compliance, particularly on rare earth exports, casting doubt on Beijing’s commitment.
China’s Ministry of Foreign Affairs (MFA) adopted a guarded tone, framing the deal as a pragmatic step while maintaining a hardline stance. The Commerce Ministry of China described the agreement as an “important step” but urged the US to “completely correct its unilateral tariff practices” to avoid further escalation.
Chinese state media, such as the Global Times, portrayed the deal as a victory, with commentator Hu Xijin asserting, “Today we have definitely driven the Americans back to the 38th parallel!”—a provocative reference to China’s resilience against US pressure.
CNBC reported that Beijing quietly exempted US products like pharmaceuticals and jet engines from retaliatory tariffs, aiming to mitigate domestic economic strain amid a 21% drop in US exports in April 2025. The Washington Post added that Chinese officials view the tariff rollback as evidence that their “defiant public posture worked,” allowing Beijing to maintain leverage without significant concessions. However, China’s continued restrictions on rare earth exports, critical for US technology and defence sectors, underscore its strategic use of trade as a geopolitical tool.
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