US, China reach trade 'deal' on tariffs, export restrictions

US President Donald Trump said the US and China reached a trade "deal" after two days of negotiations in London, suggesting tensions between the two economic heavyweights could ease.

"We are getting a total of 55% tariffs, China is getting 10%," Trump said in a June 11 social media post in all caps. "Relationship is excellent."

Trump means that Chinese tariffs on US goods will be 10%, as announced in May, while US tariffs on China will be around 55%, including previous duties, a White House official confirmed to Platts, part of S&P Global Commodity Insights.

The 55% includes 20% fentanyl and 10% reciprocal tariffs, along with 25% from other pre-existing duties, the White House official said.

Trump said the deal was "subject to final approval" in the June 11 post.

Treasury Secretary Scott Bessent discussed the deal at a June 11 hearing before the House of Representatives Ways and Means Committee.

"If China will course correct by upholding its end of the initial trade agreement we outlined in Geneva, and I believe after our talks in London they will, then the rebalancing of the world's two largest economies is possible."

Moving forward

Trump's deal announcement comes after US and Chinese officials flagged progress in the talks.

The US and China reached a "principled framework" focused on rolling out previous agreements, according to Li Chenggang, China's vice minister of Commerce and International Trade Representative.

Analysts told Platts that a breakthrough US-China deal could boost both economies and ease trade barriers. But the direct impact remained tough to gauge before the release of an official agreement.

China has imposed stiff controls on exports of rare earths and other metals where it is a key supplier, raising fears some manufacturers will have to pause production if they can't secure alternative sources.

On the US side, the Trump officials hinted that the administration could drop some restrictions on exports to China. The US had banned the export of some high-powered computer chips.

"Also, there were a number of measures the United States of America put on when those rare earths were not coming," US Commerce Secretary Howard Lutnick said, according to a CNN report. "You should expect those to come off, sort of as President Trump said: 'In a balanced way.'"

Meanwhile, some of Trump's tariffs using emergency powers as justification continue to face a court challenge.

As things stand the US Court of Appeals for the Federal Circuit has allowed tariffs imposed under the International Emergency Economic Powers Act of 1977 to remain in place after the US Court of International Trade found they exceeded executive authority.