The US and China have been negotiating fiercely in London for 48 hours, temporarily pressing the nuclear button on the trade war, but the fuse is still burning, and August 10 is the deadline!
Temporary pain relief:
The US has loosened its grip on rare earth elements.
China has also eased restrictions, allowing Shenzhen rare earth companies to resume exports.
The most drastic move is the plunge in tariffs! The US has cut punitive tariffs on China from 145% to 30%, while China has reduced its tariffs on the US from 125% to 10%. This is definitely a significant concession from both sides!
BUT! A ticking time bomb hangs overhead:
August 10 is the final deadline! If negotiations fail to reach an agreement before then, all the lowered tariffs will “boom” right back up, or even worse! This is not an agreement; it’s merely a postponement of an explosion!
A superficial ceasefire, but secretly stabbing:
The US is being sneaky: the bans on chips and aircraft equipment remain unchanged, and they boast about the court supporting their 34% “standard” tariff. I see this as a delaying tactic, with the big stick ready to come down at any moment!
China isn't backing down either: Exports to the US plummeted by 34.5% in May, setting a record; the trade war indeed hurts. But we have the rare earth trump card, forcing the US to come back to the negotiating table, this card is strong enough!
