US, China announce a trade agreement — again. Here's what it means
[June 28, 2025] By
PAUL WISEMAN
WASHINGTON (AP) — The United States and China have reached an agreement
— again — to deescalate trade tensions. But details are scarce, and the
latest pact leaves major issues between the world's two biggest
economies unresolved.
President Donald Trump said late Thursday that a deal with China had
been signed "the other day.'' China's Commerce Ministry confirmed Friday
that some type of arrangement had been reached but offered few details
about it.
Sudden shifts and a lack of clarity have been hallmarks of Trump's trade
policy since he returned to the White House determined to overturn a
global trading system that he says is unfair to the United States and
its workers.
He's been engaged for months in a battle with China that has mostly
revealed how much pain the two countries can inflict on each other. And
he's racing against a July 8 deadline to reach deals with other major
U.S. trading partners.
The uncertainty over his dealmaking and the cost of the tariffs, which
are paid by U.S. importers and usually passed on to consumers, have
raised worries about the outlook for the U.S. economy. And although
analysts welcomed the apparent easing of tensions with China, they also
warned that the issues dividing Washington and Beijing are unlikely to
be resolved anytime soon.
What did the two sides agree to?
U.S. Treasury Secretary Scott Bessent said Friday that the Chinese had
agreed to make it easier for American firms to acquire Chinese magnets
and rare earth minerals critical for manufacturing and microchip
production. Beijing had slowed exports of the materials amid a bitter
trade dispute with the Trump administration.
Without explicitly mentioning U.S. access to rare earths, the Chinese
Commerce Ministry said that “China will, in accordance with the law,
review and approve eligible export applications for controlled items. In
turn, the United States will lift a series of restrictive measures it
had imposed on China.''
The Chinese have complained about U.S. controls on exports of advanced
U.S. technology to China. But the ministry statement did not
specifically say whether the United States planned to ease or lift those
controls.
In his interview on Fox Business Network’s “Mornings with Maria,”
Bessent mentioned that the United States had earlier imposed
“countermeasures'' against China and ”had held back some vital supplies
for them.''
"What we’re seeing here is a de-escalation under President Trump’s
leadership,'' Bessent said, without spelling out what concessions the
United States had made or whether they involved America's export
controls.
Jeff Moon, a trade official in the Obama administration who now runs the
China Moon Strategies consultancy, wondered why Trump hadn’t disclosed
details of the agreement two days after it had been reached.
“Silence regarding the terms suggests that there is less substance to
the deal than the Trump Administration implies,″ said Moon, who also
served as a diplomat in China.
Wait. This sounds familiar. How did we get here?
The agreement that emerged Thursday and Friday builds on a "framework''
that Trump announced June 11 after two days of high-level U.S.-China
talks in London. Then, he announced, China had agreed to ease
restrictions on rare earths. In return, the United States said it would
stop seeking to revoke the visas of Chinese students on U.S. college
campuses.
And last month, after another meeting in Geneva, the two countries had
agreed to dramatically reduce massive taxes they'd slapped on each
other's products, which had reached as high as 145% against China and
125% against the U.S.
Those triple-digit tariffs threatened to effectively end trade between
the United States and China and caused a frightening sell-off in
financial markets. In Geneva, the two countries agreed to back off and
keep talking: America’s tariffs went back down to a still-high 30% and
China’s to 10%. That led to the talks in London earlier this month and
to this week's announcement.
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 Where does all this leave
U.S.-China economic relations?
If nothing else, the two countries are trying to ratchet down
tensions after demonstrating how much they can hurt each other.
“The U.S. and China appear to be easing the chokeholds they had on
each other’s economies through export controls on computer chips and
rare earth minerals, respectively,” said Eswar Prasad, professor of
trade policy at Cornell University. "This is a positive step but a
far cry from signaling prospects of a substantial de-escalation of
tariffs and other trade hostilities.''
Trump launched a trade war with China in his first term, imposing
tariffs on most Chinese goods in a dispute over China's attempts to
supplant U.S. technological supremacy. Trump's trade team charged
that China was unfairly subsidizing its own tech companies, forcing
U.S. and other foreign companies to hand over sensitive technology
in exchange for access to the Chinese market and even engaging
outright theft of trade secrets.
The squabbling and negotiating of the past few months appear to have
done little to resolve Washington's complaints about unfair Chinese
trade practices and America's massive trade deficit with China,
which came to $262 billion last year.
This week's agreement “includes absolutely nothing related to the
U.S.’s concerns regarding China’s trade surplus or non-market
behavior,'' said Scott Kennedy of the Center for Strategic and
International Studies. ”If the two sides can implement these
elements of the ceasefire, then they could begin negotiations on
issues which generated the initial escalation in tensions in the
first place.''
What is happening with Trump's other tariffs?
Since returning to the White House in January, Trump has made
aggressive use of tariffs. In addition to his levies on China, he
has imposed "baseline'' 10% taxes on imports from every country in
the world . And he's announced even higher taxes — so-called
reciprocal tariffs ranging from 11% to 50% — on countries with which
the United States runs a trade deficit.
But after financial markets sank on fears of massive disruption to
world trade, Trump suspended the reciprocal levies for 90 days to
give countries a chance to negotiate reductions in their barriers to
U.S. exports. That pause lasts until July 8.
On Friday, Bessent told Fox Business Network that the talks could
extend beyond the deadline and be “wrapped up by Labor Day’’ Sept. 1
with 10 to 12 of America's most important trading partners.
Trump further played down the July 8 deadline at a White House press
conference Friday by noting that negotiations are ongoing but that
“we have 200 countries, you could say 200 countries-plus. You can't
do that.”
Instead of new trade deals, Trump said his administration would in
coming days or weeks send out a letter where “we're just gonna tell
them what they have to pay to do business in the United States.''
Separately, Trump took sudden aim at Canada Friday, saying on social
media that he's immediately suspending trade talks with that country
over its plan to impose a tax on technology firms next Monday. Trump
called Canada's digital services tax “a direct and blatant attack on
our country.”
The digital services tax will hit companies like Amazon, Google,
Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users.
It will apply retroactively, leaving U.S. companies with a $2
billion bill due at the end of the month.
____
AP Writers Didi Tang and Will Weissert in Washington contributed to
this report.
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