The US and China have been negotiating fiercely in London for 48 hours, temporarily keeping the trade war nuclear button pressed, but the fuse is still burning. August 10 is the line between life and death!
Temporary painkiller:
The US has loosened its grip on rare earths.
China has also eased restrictions, allowing Shenzhen rare earth companies to export again.
The most drastic move is the plunge in tariffs! The punitive tariffs imposed by the US on China have been cut from 145% to 30%, while China's tariffs on the US have fallen from 125% to 10%. This is definitely a significant concession from both sides!
BUT! A ticking time bomb hangs overhead:
August 10 is the deadline! If no agreement is reached before then, all the reduced tariffs will “boom” back up, possibly even higher! This is not an agreement; it’s merely a deferral of an explosion!
A superficial ceasefire, but secretly stabbing:
The US is being sneaky: The bans on chips and aircraft equipment from China remain unchanged, and they flaunt the court's support for their 34% “standard” tariff. I see this as a delaying tactic, with the big stick ready to strike at any moment!
China is not backing down either: Exports to the US plummeted by a record 34.5% in May, and the trade war indeed hurts. But we have the rare earth trump card, forcing the US to come back to the negotiating table; this hand is strong enough!
