US-China Trade Agreement: Key Points

AGREEMENT ANNOUNCED

President Trump and Commerce Secretary Howard Lutnick confirmed the US and China signed a new trade deal this week, though specific details remain undisclosed. The agreement appears to build on framework negotiations that began in Geneva in May.

CORE ISSUES ADDRESSED

Rare Earth Minerals: The deal likely facilitates American access to critical rare earth materials needed for high-tech industries. China has accelerated approval of export licenses for these materials, which are essential for electric vehicles, robots, and wind turbines.

Mutual Concessions:

• China will approve qualified export applications for controlled items
• US will cancel certain restrictive measures against China
• US agreed to stop attempting to revoke visas of Chinese nationals at American universities

Fentanyl Cooperation: China designated two additional substances as fentanyl precursor chemicals, subjecting them to stricter production and export controls.

ECONOMIC CONTEXT

Both economies are feeling pressure from the trade tensions. The US economy contracted 0.5% in Q1 2025, partly due to import surges before potential tariffs. Chinese factory profits dropped over 9% year-on-year in May, with automakers particularly affected.

TARIFF STATUS

While some punitive tariffs were scaled back following the Geneva talks, certain duties remain, including Trump's 20% tariffs on Chinese goods related to fentanyl and taxes on aluminum and steel.

FUTURE OUTLOOK

Trump indicated plans for additional trade agreements with other countries, including India. Commerce Secretary Lutnick emphasized the administration's commitment to securing "deal after deal."