US President Trump (Trump) posted that the progress of the trade agreement with China was smooth. The market is still waiting for the agreement to be announced and is looking for specific details.
On Thursday (June 12), in the early morning, he posted a very short tweet on the social media platform Truth Social, saying “THE CHINA DEAL IS GREAT!”
On Wednesday evening (June 11), before attending a performance at the Kennedy Center in Washington, the President told reporters, “We have reached a very good agreement with the Chinese side. We are very satisfied with it.”
“We have got everything we need, and we will do very well,” Trump said, “I hope they do the same.”
Negotiators from Washington and Beijing reached an agreement in London on a framework agreement covering tariff rates. The agreement also lifted China’s export restrictions on rare earth minerals and allowed Chinese students to enter US universities for study. However, the contents and specific details of the agreement have not been disclosed.
The US stock market has regained most of the lost ground from earlier this spring when Trump announced tariff increases. On Thursday, the Dow Jones Industrial Average rose by more than 0.2%, the S&P 500 Index gained nearly 0.4%, and the technology-heavy Nasdaq Composite Index also rose by about 0.2%.
Oliver Pursche, Senior Vice President and Consultant at Wealthspire Advisors in Connecticut, told Reuters, “According to President Trump, the agreement is a done deal, but we have not seen any details yet, so I think the market has not reacted to it.”
“As with almost everything, the devil is in the details,” he added.
Josh Lipsky, Senior Director of the Geoeconomic Center at the Atlantic Council in Washington, said that there are fundamental differences in the interpretation of the terms of the agreement after the negotiators left Geneva, and more specific clarification is needed on the required actions.
Lipsky described the current situation as a return to square one, but still much better than starting from scratch.
Yumaochun, Director of the China Research Center at the Hudson Institute think tank, warned in a recent editorial in The Washington Times that the US should not indulge in the illusion that it can tame a Chinese Communist regime built on lies and fear through diplomatic means.
US Commerce Secretary Howard Lutnick, who participated in the negotiations, said on Wednesday that the agreement adds substantial content to the one reached last month in Geneva. In Geneva, the two sides agreed to reduce retaliatory tariffs that had reached triple-digit levels.
However, Lutnick explicitly stated that the 55% tariff on imports from China would remain fixed and cannot be altered.
Treasury Secretary Scott Bessent said during a hearing before the Senate Appropriations Committee on Wednesday that the trade agreement with China would not involve reducing US export restrictions on high-end artificial intelligence chips in exchange for rare earth supplies from China.
Bessent said, “There are no conditions regarding rare earth chips.”
The Chinese Ministry of Commerce did not immediately respond to requests for comment from the media for more information.
US and Chinese officials began their several-day meeting in London on Monday. Trump and Chinese leader Xi Jinping spoke last week, breaking the deadlock that had occurred weeks after the initial agreement reached in Geneva.
Due to China’s non-compliance with the agreement and continued restrictions on key mineral exports, the Trump administration took export control measures to prevent the sale of crucial goods such as semiconductor design software and jet engine engines to China.
Lutnick revealed that the agreement reached in London would be implemented “in a balanced manner,” with China lifting export restrictions on rare earth minerals and magnets, and the US also lifting some recent export restrictions. The negotiations concluded around midnight on June 10 in London time (7 p.m. Eastern Time), but Lutnick did not disclose more specific details.
“We have reached a framework to implement the Geneva consensus and the phone call between the two leaders,” Lutnick said. He also added that the two sides would submit the framework for approval to their respective presidents.
“If approved, we will immediately implement the framework,” he said.
Deputy Minister of Commerce Li Chenggang of the Chinese Ministry of Commerce also stated in another press conference that the two sides have reached a trade framework in principle and will submit it to the leaders of China and the US.