'Deal with China is done': Trump announces trade pact with Beijing after 2-day London talks

President Donald Trump announced on Wednesday that the United States and China have reached an understanding for a trade deal.

Trump said that once he and Chinese leader Xi Jinping give their final approval, the two countries will end the ongoing trade war and restore regular trade.

Under the terms of the deal, China will provide all rare earths and magnets and the United States will not go after Chinese students studying in the United States, Trump said in a post on Truth Social.

Once the deal is signed, Trump said that the United States will keep 55 per cent tariffs on China and China will keep 10 per cent tariffs on the United States.

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At the peak of the trade war, the United States had imposed 145 per cent tariffs on China and China had imposed 125 per cent tariffs on the United States . In the truce reached in talks in Geneva, the United States brought down its tariffs to 30 per cent and China brought down its tariffs to 10 per cent.

Trump’s announcement after two days of US-China trade talks in London. Previously, it had been reported that the focus of talks was more on rare earths than on tariffs.

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Earlier in the day, US Commerce Secretary Howard Lutnick said that the United States and China had "reached a framework to implement the Geneva consensus" and the understanding would take “negativity out” of the trade relationship. Separately, US Trade Representative Jamieson Greer said that he was confident that the implementation of the framework would resolve the issue of rare earths.

It is not yet clear whether Trump was referring to the same framework agreement in his social media post.

Analysts have said that talks are expected to continue through the summer but the worst of the trade conflict appears to have passed.

The US-China talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, “but at least relations may not worsen as talks continue throughout the summer”, AGF Investments’ Greg Valliere told Yahoo News.

Veronique de Rugy of the Mercatus Center at George Mason University told Yahoo that talks continued to show China’s leverage: “China is hurting, yes, but they still hold the upper hand on critical resources, and they know how to use them.”

While Trump in his social media post mentioned getting rare earths from China, he did not mention anything about relaxing US export controls on semiconductors, jet engines, and other technologies directed at China. Any relaxation would mean a big break from yearslong US bipartisan US position that sought to deprive China of important Western technologies.