After two days of closed-door negotiations at Lancaster House in London, the United States and China reached a preliminary agreement to revive the trade truce first struck in Geneva in May.
“Our deal with China is done,” Trump posted Wednesday on Truth Social. “WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT!”
While the announcement offered few specifics, administration officials said Beijing has agreed to resume shipments of magnets and rare earth minerals to the United States. In return, Chinese students will retain access to American universities. Beyond that, little changes as tariffs remain firmly in place.
According to a senior White House official, the U.S. package consists of a 10% baseline tariff on Chinese imports, a 20% surcharge linked to fentanyl trafficking, and a 25% continuation of previous duties. That brings the effective tariff rate to 55%. China, by contrast, will impose a flat 10% tariff on American goods.
As in Geneva, the core sticking point remains strategic exports. Washington has pushed for the immediate removal of China’s restrictions on rare earth elements, critical for U.S. manufacturing, defense, and medical devices. China has agreed to restart deliveries, though officials say the details are still being finalized. In return, the U.S. has committed to rolling back its own export controls, imposed in April, on semiconductor software, aerospace components, and select high-tech items.
“This is a real step forward,” said Commerce Secretary Howard Lutnick, adding that the framework aims to enforce the commitments made in Geneva. Lutnick, along with Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, is expected to brief Trump on the deal today. Final approval will rest with Trump and Chinese President Xi Jinping, who spoke directly last week for the first time since Trump returned to office in January.
The agreement arrives after months of escalating trade friction have already inflicted serious economic damage. Since Trump’s self-declared “Liberation Day” on April 2, bilateral trade has largely ground to a halt. Tariffs spiked to as high as 145%, making Chinese imports effectively unaffordable for U.S. businesses.
Major corporations have felt the impact. Apple warned of an additional $900 million in quarterly costs due to tariffs. Boeing has not sold an aircraft to China since 2019. Chinese e-commerce giants Shein and Temu were hit hard by the elimination of the “de minimis” exemption, which had allowed packages under $800 to enter the U.S. tariff-free.
For many in the private sector, even a partial reopening of trade channels is a welcome relief. But in Beijing, the official tone remained cautious. State news agency Xinhua described the outcome as an agreement “in principle,” signaling that key details remain unsettled. Talks continued into the early morning hours and were characterized as “frank and professional”, a phrase often used to signal unresolved tensions.
Meanwhile in Washington, Trump secured a legal victory that could bolster his position. A federal appeals court stayed a lower court ruling that had deemed some of his tariffs unlawful, allowing the duties to remain in effect at least until a final decision is reached. While the legal dispute did not come up in the London negotiations, it reinforces the administration’s leverage in this phase of talks.
Whether the truce can hold past the summer remains uncertain. The Geneva deal included a 90-day suspension of the most punitive tariffs, set to expire in August. No additional summits have been scheduled. “Both sides are motivated to move forward,” Greer said, but ultimately, the decision lies with Trump.
