On June 11, a preliminary trade agreement between the U.S. and China announced unilaterally by President Trump brought a brief respite to global markets but also deeper uncertainty. The agreement made key concessions on rare earth supply but at the cost of an extremely unbalanced tariff structure, fully exposing the complex reality of the game between both sides in high-tech, economic, and geopolitical aspects.
At the same time, the controversial new immigration policy launched domestically by the Trump administration, along with the subtle changes in the relationship with tech giant Elon Musk, together contribute to the high uncertainty of its second-term policies.
The compromise and cost of the agreement: Rare earths for tariffs
According to Trump's statement on his social platform Truth Social, the core of the agreement is a strategic exchange.
China's rare earth 'trump card' is effective. The agreement stipulates that China commits to 'preemptively providing all magnets and any necessary rare earth materials.' This move aims to alleviate the severe supply chain crisis the U.S. has faced in high-tech, military, and electric vehicle industries since China implemented export controls in April 2025. Companies like General Motors and Ford faced risks of production line shutdowns, highlighting the deep dependence of the U.S. on China for this strategic resource. Although this clause is a 'desperate need' for the U.S., the stability of its implementation and whether China will completely lift controls remain in question.
The extremely unbalanced tariff structure has become the focus. In exchange, the agreement sets U.S. tariffs on China at 55%, while China's tariffs on the U.S. are only 10%. Although this rate is a significant drop from the previously rumored 145%, it is still much higher than the average level of about 19.3% during Trump's first term. Goldman Sachs analysis believes this move will significantly drag down the Chinese economy, while U.S. consumers will inevitably have to pay for the high import costs. Additionally, the clause allowing Chinese students to return to U.S. universities is interpreted as a gesture of easing, but its symbolic significance outweighs substantial concessions.
Trump's statement reserves the possibility that 'the agreement must be finally approved by both leaders,' which is seen as a continuation of his signature 'art of the deal' strategy, leaving room for future policy adjustments and adding variables to the final implementation of the agreement.
Trump's domestic agenda: The 'Golden Card' plan and social divides
On the same day, the highly anticipated 'Golden Card' immigration program website officially launched. This program allows foreign investors who pay $5 million to obtain U.S. permanent residency and even a pathway to citizenship.
Supporters believe this move can attract high-net-worth individuals to inject vitality into the U.S. economy, but critics point out that this is a blatant 'selling of green cards,' which will exacerbate social injustice and may provide a breeding ground for illegal capital flows. This policy opens the door to wealth but closes a narrow door to ordinary immigrants, reflecting deep social divides that may become a continuous point of contention during Trump's term.
Musk and Trump: Can their relationship be repaired?
The relationship between the tech industry and the White House has also been tumultuous. Tesla CEO Elon Musk publicly apologized on X platform for previous criticisms of Trump, calling his remarks 'excessive.' This move is seen as a cautious adjustment after Trump threatened to terminate SpaceX government contracts, causing Tesla's stock price to plummet.
Musk was once a key supporter of Trump, even briefly holding public office. However, his recent actions of reducing political donations and resigning mark a distancing of the relationship. Musk warned in a public interview that the U.S. power shortage will constrain AI development and pointed out China's advantages in power generation; these remarks are seen as an indirect challenge to the Trump administration's industrial policy. The shift from close allies to subtle players between Musk and Trump reflects the complex and tense interaction between U.S. tech capital and political power.
Analysis and outlook: Uncertainty in a high-risk game
The achievement of this preliminary U.S.-China agreement can be seen not so much as the beginning of cooperation, but rather as a pause in a high-risk game. China, leveraging its strategic advantage in the rare earth sector, forced the U.S. to compromise on supply chain security; while Trump maintains high tariffs, continuing his 'America First' economic pressure strategy.
Looking ahead, the details of the agreement's implementation, the stability of rare earth supply, and the pressures faced by the Trump administration both internally and externally will all be focal points of ongoing market attention. The uncertainty of the global economy may become the new normal under the dual influence of the fragile balance in U.S.-China relations and the political tensions within the U.S.
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