Trump Says China Will Pay 55% Tariffs in New Trade Deal
President Donald Trump has made a new trade deal with China that will raise total tariffs to 55%. The deal was reached in London following two days of negotiations between US and Chinese representatives.
The agreement is about obtaining more rare earth minerals and magnets that American automobile manufacturers urgently require. China dominates the majority of the world supply of these materials, which are utilized in producing car components such as windshields and doors.
Trump posted on his Truth Social site: “Our China deal is done, pending final approval with President Xi and me. We’re receiving 55% tariffs total, and China is receiving 10%. Relationship is excellent!”
Car Industry Gets Relief from Supply Crisis
The American automobile industry came close to halting production as China had suspended supplies of crucial magnets. The materials are used to produce cars, electronics, and military equipment.
China will supply “full magnets, and any needed rare earths, upfront” to the US under the new arrangement. This would allow American plants to return to full production. The agreement also involves opening up more space for Chinese students to study in US universities and colleges. Trump indicated that this “has always been good with me.”
Trade War Expenses Remain Steep Despite Agreement
The 55% tariff rate may appear like an increase, but according to White House officials, it involves Trump’s 10% floor tariff on all imports, added to a 20% penalty for trafficking fentanyl, and in-place 25% tariffs on China. China had only committed to relaxing rare earth export restrictions for six months, US accounts say. That means the agreement could soon have to be renegotiated.
The trade breakthrough comes as fresh inflation figures reveal prices are up to 2.4% in May from 2.3% in April. Most economists fear Trump’s trade battles will increase the cost of things for American consumers. Firms such as Walmart, Best Buy, Ford, and Procter & Gamble have threatened to pass on the increased costs of tariffs to consumers.
What’s in the Future
The agreement is still subject to the approval of Trump and Chinese President Xi Jinping. Trump has previously canceled trade deals, so nothing should be assumed until the two leaders approve. US Commerce Secretary Howard Lutnick stated the London negotiations added “meat on the bones” to an earlier accord reached in Geneva last month.
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