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 line between life and death!
Temporary painkiller:
The US has loosened its grip on rare earth exports a bit.
China has also allowed some water to flow, letting Shenzhen rare earth companies resume exports.
The most drastic move is the plunge in tariffs! The punitive tariffs imposed by the US on China have been slashed from 145% to 30%, while China's tariffs on the US have dropped from 125% to 10%. This is definitely a significant concession from both sides!
BUT! A time bomb hangs overhead:
August 10 is the deadline! If no agreement is reached before then, all the lowered tariffs will “explode” back up, or even more severe! This is not an agreement; it's simply a delayed explosion!
Surface ceasefire, secret stabbing:
The US is scheming: The ban on chips and aircraft equipment from China remains unchanged, and it boasts about the court supporting its 34% “standard” tariff. I see this as a delaying tactic, with the big stick ready to swing down at any moment!
China hasn't backed 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, and this card is strong enough!
