Pic source: NDTV
Date: June 11, 2025
In a decisive breakthrough, President Donald Trump declared Wednesday that the United States and China have struck a major trade deal covering rare earths, tariffs, and educational visas—pending final approval by both leaders.
Key Highlights of the Agreement
- Rare earth minerals & magnets secured China has committed to supplying the U.S. with rare earth elements and specialty magnets, essential for U.S. defense, tech manufacturing, EV batteries, semiconductors, and more.
- Tariff framework finalized Under the new deal, the U.S. will impose 55% tariffs on selected Chinese imports, while China will impose 10% tariffs on U.S. exports.
- Reviving student visas The U.S. will restore and honor student visas for Chinese nationals, a critical aspect that Trump cited as a “good” integration.
Why This Matters
1. Stabilizes supply chains
The U.S. relies heavily on China for rare earths, essential in sectors spanning energy to aerospace. Stockpiles had been dwindling, and this deal averts potential shortages.
2. Recalibrates tariff policy
With U.S. tariffs lifting from 30% to 55%, the dynamic shifts toward a stronger American negotiating position, while reinforcing a retaliation model.
3. Boosts education diplomacy
Reopening student visas fosters academic and cultural exchanges, balancing trade tensions with soft power diplomacy.
What Comes Next
Formal sign-off expected by Trump & Xi
Final ratification is awaited—an official ceremony to cement the deal is anticipated.
Legal challenges on tariffs
U.S. courts are reviewing prior executive authority on trade, but current rulings uphold the framework pending July hearings.
Global ramifications
Ensuring a stable rare earths supply and updating tariff regimes may calm investor nerves, and could propel allied industries (e.g., EVs, tech, defense) forward.
Expert Reactions
- Markets stabilize: Industry insiders say the deal reduces disruption for manufacturing, aerospace, and automotive sectors.
- Diplomatic nuance: Experts caution it’s a balancing act, with China likely expecting relaxed U.S. tech export controls in exchange.
Bottom Line
Trump’s announcement marks a significant reset in U.S.–China relations—precisely aligning rare earth security with student visa reinstatement and a tariff recalibration. With the deal set to go to leaders’ desks, markets and manufacturers will be watching closely.
