In a surprise announcement on Truth Social, former U.S. President Donald Trump claimed a breakthrough in U.S.-China trade negotiations, stating that a deal concerning rare earths and student visas has been “done,” pending final approval from Chinese President Xi Jinping and himself.
The announcement followed two days of intensive talks in London, as both countries sought to ease rising tensions that had surged since Trump launched a new wave of tariffs earlier this year. Though light on specific details, the deal appears to revive the spirit of a previous truce agreed upon in Geneva in May.
At the core of the tentative deal is a critical agreement on rare earth minerals and magnets, resources essential for a broad range of technologies, including electric vehicles, smartphones, and military equipment. The U.S. had raised concerns that China was deliberately slowing down exports of these materials as a pressure tactic in ongoing disputes.
In the new deal, China has reportedly agreed to resume stable supplies of these key minerals to U.S. firms. In exchange, the U.S. has agreed to walk back proposals to limit visas for Chinese students an issue that had become a flashpoint in diplomatic relations, particularly given the volume of Chinese students studying in American universities.
Framework Reached but Final Approval Pending
According to Chinese Vice Commerce Minister Li Chenggang, both sides have “in principle” reached a framework to implement the consensus from the June 5th phone call between Trump and Xi and the May Geneva meeting. U.S. Commerce Secretary Howard Lutnick echoed this, stating the framework was ready to be signed off once both presidents gave the green light.
“Once the presidents approve it, we will then seek to implement it,” Lutnick told reporters, calling the London talks a “clean-up” of prior discussions and asserting the sides are “totally on the right track.”
Despite the optimism, White House Press Secretary Karoline Leavitt added a note of caution, stating that Trump was still reviewing the terms. “But what the president heard, he liked,” she said.
The deal follows months of rising tension between the world’s two largest economies. Earlier in the year, Trump introduced sweeping new tariffs on foreign imports, targeting Chinese goods most severely. In retaliation, Beijing imposed higher tariffs on U.S. products, leading to a tit-for-tat escalation.
In May 2025, both nations met in Geneva and reached a temporary truce, which Trump described as a “total reset.” Under that agreement:
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U.S. tariffs on Chinese products were reduced from 145% to 30%.
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China slashed tariffs on U.S. imports to 10%.
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China agreed to lift restrictions on critical mineral exports.
However, the truce quickly unraveled, with both sides accusing each other of breaching non-tariff commitments.
Rare earth elements though not particularly rare are crucial for advanced manufacturing and have become a geopolitical lever in the escalating U.S.-China rivalry. China dominates the global production of these materials, refining nearly 90% of the world’s supply.
The United States, heavily dependent on these imports, has increasingly viewed this reliance as a national security risk, especially as it ramps up investment in semiconductors, electric vehicles, and defense systems.
This backdrop has made the rare earths agreement especially significant, though it remains unclear whether China will resume full volumes of export, or maintain strategic quotas.
Student Visas: A Diplomatic Pressure Point
Another major component of the deal involves U.S. restrictions on Chinese student visas, particularly in science and engineering fields. Trump had threatened to curb access for Chinese students, citing concerns over intellectual property theft and espionage linked to AI and semiconductor technologies.
China had pushed back strongly, accusing the U.S. of politicizing education and undermining people-to-people exchanges. The new deal reportedly rolls back some of those proposed restrictions, although precise details have not been released.
Markets Shrug, Experts Cautious
Despite the announcement, global markets responded with muted interest. Analysts pointed out the deal’s lack of specificity and limited scope. Terry Haines, founder of Pangaea Policy, dismissed the agreement as symbolic:
“Setting the Geneva ‘pause’ back on track is the smallest of accomplishments. It doesn’t suggest that a broad U.S.-China trade deal or geopolitical rapprochement is any closer in the foreseeable future.”
Treasury Secretary Scott Bessent, testifying before Congress, also tempered expectations. “The recent talks were narrowly focused,” he said. “A comprehensive deal is still a long way off.”
While the rare earths deal represents a tentative step forward, the broader landscape remains fraught. The U.S. continues to impose restrictions on Chinese tech companies, particularly in the AI and semiconductor sectors. China, in turn, is building strategic alliances to reduce reliance on American technology.
Still, both sides may have realized the importance of economic interdependence, especially with global supply chains under strain and inflationary pressures building.
For now, Trump’s declaration of a “done” deal is more political than practical. The world will be watching closely to see if this fragile agreement can hold and whether it leads to more meaningful breakthroughs in the months ahead.
