China to Supply Rare Earths, U.S. Imposes 55% Tariffs

- China reaffirms U.S. trade deal: rare earths for student access. - High tariffs spark economic concerns; deal's long-term efficacy questioned. On June 12, 2025, Reuters reported that China reaffirmed its commitment to a new trade deal with the United States, following a phone call between President Xi Jinping and former U.S. President Donald Trump. During this call, China reportedly emphasized its intention to honor the agreement, stating it "always keeps its word." Key elements of the trade deal stipulate that China will supply rare earth materials and magnets to the U.S., while in exchange, the United States will permit Chinese students to attend American colleges and universities. However, as part of this agreement, the U.S. is implementing 55% tariffs on Chinese imports, and China will impose 10% tariffs on U.S. goods in response. On June 10 or June 11, 2025, former U.S. President Donald Trump stated on Truth Social, "the deal was completed, pending final approval from President Xi and me." Subsequently, during a regular news briefing, Lin Jian, a spokesperson for the Chinese Foreign Ministry, reiterated China's position, stating that China has consistently honored its commitments and emphasizing that both parties should adhere to the agreement. Despite the agreement, analysts express concerns that the deal could negatively impact both economies and fail to address more profound trade issues, such as China's significant control over the rare earth supply chain. Furthermore, they contend these high tariffs could curtail trade, increase U.S. inflation, and hinder economic growth in both nations. Additionally, some critics suggest the deal might be a temporary solution, arguing it does not resolve core problems and could allow Beijing to use supply cutoffs as a threat in future disputes. Consequently, the specifics of the deal's implementation remain somewhat unclear.