Former President Donald Trump announced a sweeping new deal with China that resumes the flow of critical rare earth minerals to the United States and reopens US educational institutions to Chinese students. The announcement, made on Wednesday (11), follows months of escalating trade tensions and visa crackdowns.
The deal, according to Trump, is subject to final approval by both him and Chinese President Xi Jinping. It marks a tentative return to diplomatic cooperation amid a volatile bilateral relationship.
Tariff Balancing Act: US Imposes 55 per cent, China Responds with 10 per cent
A White House official provided a breakdown of the revised tariff structure:
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A 55 per cent total US tariff on Chinese imports, combining:
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10 per cent baseline “reciprocal” tariff
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20 per cent fentanyl-related penalty tariff
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25 per cent pre-existing tariff measures
Meanwhile, China will impose a flat 10 per cent tariff on US goods.
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The structured tariff package aims to penalize China’s alleged role in fentanyl trafficking while preserving leverage on rare earth supply and high-tech trade.
Rare Earth Access Restored Amid Trade Reset
This agreement restores access to magnets and rare earth minerals, materials critical to defense systems, electronics, and renewable energy production. The US had previously faced limitations following China’s export restrictions, which were met with retaliatory American export bans on high-tech goods like aircraft and semiconductor design tools.
At the end of a two-day summit in London, US Commerce Secretary Howard Lutnick stated the new framework gives “meat on the bones” to the preliminary Geneva agreement struck last month. That deal had been stalling over Chinese curbs on mineral exports, prompting fresh rounds of tariff warfare.
Educational Pathways Reopen for Chinese Students
In a surprising diplomatic shift, Trump also confirmed that Chinese students will once again be allowed entry to US colleges and universities. This reverses previous efforts to limit Chinese student visas, which had drawn criticism from higher education institutions across the US.
The new deal signals that both nations are willing to explore collaboration beyond trade, tapping into education and soft diplomacy to repair frayed relations.
Markets Still Cautious Amid Uncertainty
While the announcement sparked cautious optimism in diplomatic circles, global markets remain wary. Trump’s erratic trade policies in the past have led to severe disruptions at ports, widespread confusion among exporters, and billions in business losses.
Whether this latest deal brings true stability or simply temporary relief remains to be seen. For now, the rare earth pipeline is open, and the US educational sector is bracing for the return of a large cohort of Chinese students.
