US and China sign trade deal

The United States and China have agreed on a trade deal first discussed in Geneva last month, according to U.S. Commerce Secretary Howard Lutnick. The agreement, signed two days ago, ensures China will supply rare earth materials used in products like wind turbines and jet engines. In return, the U.S. will ease some trade restrictions.

Lutnick shared this news on Bloomberg Television, saying, “They’ll send us rare earths, and we’ll lower our trade barriers.” The deal sets tariffs at 55% for China and 10% for the U.S., matching earlier terms. However, this agreement doesn’t fully solve bigger issues like fentanyl trafficking or U.S. companies’ access to Chinese markets.

The White House is also working on trade agreements with ten other major trading partners, with a deadline of July 9 to finalize them. If no deals are reached, President Trump may impose higher tariffs, which he paused in April. Lutnick noted that countries signing deals will get clear trade terms, while others will face set tariff rates. Market reactions have been calm, with futures trading showing little change.

Some worry that higher tariffs could slow global growth and raise inflation, with JPMorgan analysts estimating a 40% chance of a U.S. recession in late 2025. Despite these concerns, Lutnick is optimistic about upcoming deals, including one with India, as the U.S. aims to strengthen trade ties globally.