Trump had also announced in June via Truth Social that "OUR DEAL WITH CHINA IS COMPLETE", but, as it turned out, the deal had never been completed.
Everything went well during his meeting with China’s President, Xi Jinping, as signalled by the American President, Donald Trump, who even gave the talks a score of… 12 out of 10! Of course, negotiations between the US and China will continue with the main objective being the regulation of tariffs, the trade of rare earths, and the fight against fentanyl. US President Donald Trump stated that the issue of rare earths has been "resolved," stressing that rare earth exports from China will continue to flow to the rest of the world based on a one-year agreement that is expected to be extended.
Global impact
In an interview on Air Force One, Trump stated that China agreed to continue rare earth exports as part of the deal with the US. "All the rare earths have been settled," he characteristically reported, emphasising that the agreement has a global impact, and not just on the US. Rare earths, 17 elements that play a small but critical role in cars, aeroplanes, and weapons, have emerged as China's most powerful source of leverage in the trade war with the US. Export controls introduced in April caused severe shortages worldwide, mainly for magnets, resulting in some automakers suspending production before exports rebounded, following agreements between Beijing, Washington, and the European Union. However, in October, China expanded to more restrictions, increasing the number of restricted elements to 12 and adding the equipment used for their processing.
«It looks like a tactical pause»
Some analysts commented on the initial results of the talks, arguing that the agreement may be more of a tactical pause than a strategic reversal. Tareck Horchani, head of trading at Maybank Securities in Singapore, stated: "The US-China trade truce is expected to be treated as a relief for markets, rather than a real restructuring. When such truces happen, the first issue mentioned by both sides is agriculture, a politically sensitive sector in the US, where farmers are a central electoral group." "This deal looks more like a tactical pause than a strategic reversal, as the fundamental tensions in the areas of technology, supply chain, and rare earths remain unresolved," he said.
Disappointment over soybeans
The soybean market reacted negatively to the initial results of the talks, as markets were expecting more specific details regarding agricultural purchases by China. Soybean futures in Chicago fell 1% due to disappointment over the lack of clear data on agricultural purchases. Andrew Whitelaw, an analyst at the Australian firm Episode 3, commented that "there is nothing tangible here. The market was expecting a trade deal that would restore trade flows, but it seems the deal is not as specific as we had hoped."
Tariff reduction to 47%
Trump stated that he agreed to reduce tariffs on Chinese imports from 57% to 47%, in exchange for China resuming soybean purchases, continuing rare earth exports, and taking measures against the illegal trade of fentanyl. In his statements, Trump described the meeting with Xi as "incredible" and noted that the two sides had reached important decisions. "It was a meeting 12 out of 10," Trump told reporters.
Taiwan excluded from talks
Meanwhile, Taiwan was not part of the discussions, as confirmed by Trump himself. Trump announced that he will visit China in April, while Xi will visit the US at a later date, without specifying an exact timetable for the Chinese president’s visit. The results of the meeting, as announced by Trump so far, exceed expectations, thanks in part to the personal diplomacy of the two leaders, which was strong enough to stop the escalation and deliver results that seemed unimaginable, according to Alfredo Montufar-Helu, Managing Director of Ankura Consulting. However, as he stressed, tensions will not completely disappear, as many outstanding bilateral issues remain, which are fundamental to US-China competition.
The first meeting after 6 years
This was the first meeting between Trump and Xi after six years, lasting one hour and 40 minutes. Before the meeting, the two leaders adopted a more conciliatory tone, with Trump calling Xi an "old friend" and stressing that they maintain "a very good relationship," while Xi pointed out that China’s economic ambitions would not undermine Trump’s vision to make the US "great again."
Tensions between the world’s two largest economic superpowers have peaked this year. The latest escalation came this month, with Beijing imposing export controls and Washington threatening an export ban on software to China. The US had, in recent days, communicated details of the deals it wished to achieve with China – from curbing the flow of fentanyl to the US to the divestiture of TikTok from its Chinese parent company ByteDance.
Caution from China
China was more cautious about the prospects of a deal, but, in a possible sign of relationship restoration, China bought the first soybean cargoes from the US in several months, as reported by Reuters.
Relations with North Korea
Regarding North Korea, Trump said there was no time for talks with Kim Jong Un during his visit to South Korea. "We couldn't talk, because we were too busy and really came for this meeting," he said, adding that it would be "disrespectful" to distract from the meeting with Xi. Asked about the issue of denuclearisation, Trump said that accepting nuclear de-escalation is something they are discussing with Russia and that China could participate if something related happens.
Market reactions
The markets, while showing optimism about the reduction in trade tensions, appear to be cautious. The enduring trade negotiations between the US and China, with Trump’s previous announcements of a deal failing, raise doubts about the substance of this latest truce. Trump had announced in June via Truth Social that "OUR DEAL WITH CHINA IS COMPLETE," but, as it turned out, the deal had never been completed. Some observers warn of a repeat of the "previous upset" and speculate that this latest episode may be just a tactical postponement and not a real change in trade policy.
www.bankingnews.gr
Global impact
In an interview on Air Force One, Trump stated that China agreed to continue rare earth exports as part of the deal with the US. "All the rare earths have been settled," he characteristically reported, emphasising that the agreement has a global impact, and not just on the US. Rare earths, 17 elements that play a small but critical role in cars, aeroplanes, and weapons, have emerged as China's most powerful source of leverage in the trade war with the US. Export controls introduced in April caused severe shortages worldwide, mainly for magnets, resulting in some automakers suspending production before exports rebounded, following agreements between Beijing, Washington, and the European Union. However, in October, China expanded to more restrictions, increasing the number of restricted elements to 12 and adding the equipment used for their processing.
«It looks like a tactical pause»
Some analysts commented on the initial results of the talks, arguing that the agreement may be more of a tactical pause than a strategic reversal. Tareck Horchani, head of trading at Maybank Securities in Singapore, stated: "The US-China trade truce is expected to be treated as a relief for markets, rather than a real restructuring. When such truces happen, the first issue mentioned by both sides is agriculture, a politically sensitive sector in the US, where farmers are a central electoral group." "This deal looks more like a tactical pause than a strategic reversal, as the fundamental tensions in the areas of technology, supply chain, and rare earths remain unresolved," he said.
Disappointment over soybeans
The soybean market reacted negatively to the initial results of the talks, as markets were expecting more specific details regarding agricultural purchases by China. Soybean futures in Chicago fell 1% due to disappointment over the lack of clear data on agricultural purchases. Andrew Whitelaw, an analyst at the Australian firm Episode 3, commented that "there is nothing tangible here. The market was expecting a trade deal that would restore trade flows, but it seems the deal is not as specific as we had hoped."
Tariff reduction to 47%
Trump stated that he agreed to reduce tariffs on Chinese imports from 57% to 47%, in exchange for China resuming soybean purchases, continuing rare earth exports, and taking measures against the illegal trade of fentanyl. In his statements, Trump described the meeting with Xi as "incredible" and noted that the two sides had reached important decisions. "It was a meeting 12 out of 10," Trump told reporters.
Taiwan excluded from talks
Meanwhile, Taiwan was not part of the discussions, as confirmed by Trump himself. Trump announced that he will visit China in April, while Xi will visit the US at a later date, without specifying an exact timetable for the Chinese president’s visit. The results of the meeting, as announced by Trump so far, exceed expectations, thanks in part to the personal diplomacy of the two leaders, which was strong enough to stop the escalation and deliver results that seemed unimaginable, according to Alfredo Montufar-Helu, Managing Director of Ankura Consulting. However, as he stressed, tensions will not completely disappear, as many outstanding bilateral issues remain, which are fundamental to US-China competition.
The first meeting after 6 years
This was the first meeting between Trump and Xi after six years, lasting one hour and 40 minutes. Before the meeting, the two leaders adopted a more conciliatory tone, with Trump calling Xi an "old friend" and stressing that they maintain "a very good relationship," while Xi pointed out that China’s economic ambitions would not undermine Trump’s vision to make the US "great again."
Tensions between the world’s two largest economic superpowers have peaked this year. The latest escalation came this month, with Beijing imposing export controls and Washington threatening an export ban on software to China. The US had, in recent days, communicated details of the deals it wished to achieve with China – from curbing the flow of fentanyl to the US to the divestiture of TikTok from its Chinese parent company ByteDance.
Caution from China
China was more cautious about the prospects of a deal, but, in a possible sign of relationship restoration, China bought the first soybean cargoes from the US in several months, as reported by Reuters.
Relations with North Korea
Regarding North Korea, Trump said there was no time for talks with Kim Jong Un during his visit to South Korea. "We couldn't talk, because we were too busy and really came for this meeting," he said, adding that it would be "disrespectful" to distract from the meeting with Xi. Asked about the issue of denuclearisation, Trump said that accepting nuclear de-escalation is something they are discussing with Russia and that China could participate if something related happens.
Market reactions
The markets, while showing optimism about the reduction in trade tensions, appear to be cautious. The enduring trade negotiations between the US and China, with Trump’s previous announcements of a deal failing, raise doubts about the substance of this latest truce. Trump had announced in June via Truth Social that "OUR DEAL WITH CHINA IS COMPLETE," but, as it turned out, the deal had never been completed. Some observers warn of a repeat of the "previous upset" and speculate that this latest episode may be just a tactical postponement and not a real change in trade policy.
www.bankingnews.gr
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