It’s official.
After months of diplomatic brinkmanship, tariff theatrics, and supply chain anxiety that kept CEOs up at night, the United States and China have reached what they’re calling a “framework trade deal,” finalized in London on June 10.
Trump, never one to shy away from drama, declared it “done” the next day. But like most “done” deals in geopolitics, this one is still awaiting final sign-off from both governments—and probably several revisions once the cameras are off.
The London Agreement is the latest chapter in the on-again, off-again trade soap opera between the world’s two largest economies.
It doesn’t resolve their strategic rivalry or fix deep structural issues—but it does deliver immediate relief to strained industries, restore some supply chains, and toss a few bones to politically sensitive constituencies.
And all this happened, notably, without Europe at the table—again.
Donald Trump’s approach to diplomacy might lack subtlety, but it undeniably has a rhythm: isolate, escalate, negotiate, then spin the outcome.
This time, he put Beijing under pressure by maintaining sky-high tariffs, blacklisting tech firms, and slapping restrictions on student visas. All while China cut off rare earth exports, effectively shutting down key sectors of U.S. manufacturing. It was a game of economic chicken—and just as factory lines began grinding to a halt, both sides blinked.
What followed was a whirlwind of high-level negotiations in Geneva and London, culminating in a framework that brings rare earth exports back online, tempers tariffs, and keeps Chinese students in American universities.
It’s not quite a peace treaty—but it’s a ceasefire with perks.
The devil lies in the fine print, as always.
The U.S. gained a lot.
Starting with the resumption of rare earth exports, as Beijing agreed to restart shipments of critical minerals and magnets that power everything from Teslas to Tomahawk missiles. Given that China controls 60 percent of global production and processes 90 percent of it, this was a vital concession.
U.S. tariffs on Chinese goods drop from a punishing 145 percent to a still hefty 55 percent. That figure includes a mix of original Trump-era tariffs, a 10 percent baseline, and a fentanyl-linked penalty tariff. It’s relief—but not free trade.
Some export restrictions on mid-tier semiconductors and aerospace components are eased. And Chinese students—previously at risk of losing visas—can stay. Universities sighed with relief. So did textbook publishers and bubble tea shops.
China could also secure this or that.
Chinese tariffs on U.S. imports fall to just 10 percent, allowing them to resume buying American goods at near-pre-trade-war levels.
By selectively loosening export restrictions on jet engines, mid-tier chips, and aerospace components, the U.S. didn’t just let Chinese firms tiptoe back into its tech markets—it gave them a measured, strategic view into supply chains that can be reverse-engineered later.
China’s control over rare earths remains unchanged in the long term. Export licenses are granted for six months at a time. They’ve resumed shipments—for now. But if negotiations sour again, the faucet can be turned off just as quickly.
The deal has a whole bunch of winners.
Like the American automobile industry. With rare earths flowing again, Detroit is back in motion. Before, Ford had temporarily shut down Explorer SUV production. Suzuki froze EV assembly lines. Those pauses are now over—at least until the next disruption.
Having regained access to their largest export market, Chinese rare earth miners can resume full operations. Their brief weaponization of exports paid off in concessions.
And, of course: From Munich to Mumbai, supply chains are breathing easier. Electronics, EVs, and wind turbines are back on track.
The win is only partial to U.S. tech firms, like Intel, Qualcomm, and Nvidia. They can sell again—but only select technologies. Cutting-edge chips remain off-limits, keeping the rivalry intact but business afloat.
The roughly 280,000 Chinese students in the U.S. won’t need to pack their bags just yet. Beijing sees this as a symbolic win. American institutions see it as a financial one.
There are many losers, as well.
Think U.S. consumers and small businesses: a 55 percent tariff is still 55 percent more than they were paying before. Importers relying on Chinese components face cost increases, passed along to end-users.
Despite being strategically irrelevant to rare earths, American farmers remain collateral damage. Brazil has grabbed global market share, and nothing in this deal changes that.
And of course, European manufacturers. Many of those use Chinese rare earths too. They’ll benefit from restored exports but still will remain second-tier players in this geopolitical tug-of-war.
Ah, Europe.
If global trade were a Zoom meeting, the EU would be the person on mute, frantically waving while the U.S. and China argue over everything.
Not invited to London. Not consulted on critical mineral access. Not granted a seat at the table. Europe is again stuck reacting to the aftermath of a deal it didn’t help shape.
The short-term win? European automakers like Volkswagen and Peugeot no longer must shut down EV production due to rare earth shortages.
The long-term risk? They’re still completely dependent on China for key inputs—and they don’t have the leverage Washington just flexed to change that.
While Brussels is trying to build alternative supply chains—courting African nations, launching raw material alliances, even considering a European Mining Act—it’s a long road. In the meantime, Europe remains the quiet middle child caught between two economic parents with wildly different parenting styles and nuclear-powered tempers.
What does the London Agreement mean for the global economy?
For now, it’s a stabilizer.
It prevents immediate crisis and restores vital flows of materials and capital. But it doesn’t address the real issues driving the U.S.-China conflict: technological supremacy, supply chain independence, and strategic dominance.
The U.S. gets some breathing room and strategic leverage. China gains time and partial access to tech. Europe remains in limbo—watching, reacting, and slowly realizing that neutrality in a great power rivalry is less noble and more naïve than it sounds.
This deal won’t last forever. Six months from now, export licenses will need to be renewed. Political cycles on both sides may upend the fragile framework. And the fundamental tensions that ignited the trade war in the first place? Still simmering just below the surface.
Thus, the London Agreement isn’t peace—it’s a pause button. Trump got results, Beijing got access, and Europe got… nothing, again.
At least this time they saw it coming.
