US-China Trade: Tariffs Stay Despite Deal – Eyes on Rare Earths and Deal

US-China Trade Deal Leaves Tariffs in Effect: What’s Next?

Last week, US President Trump and Commerce Secretary Howard Lutnick declared the US and China had signed a trade agreement. However, the details of the agreement were limited, raising concerns about the effectiveness of the deal and whether both sides would stick to the terms.

While the details of the agreement are sketchy, Beijing pointed to easing trade restrictions, stating,

“China will, in accordance with the law, approve export applications for controlled items that meet relevant requirements. The US side will accordingly lift a series of restrictive measures imposed on China.”

Beijing likely referred to the approval of licenses for rare earth mineral exports to the US and the removal of US controls on semiconductor exports to China. The removal of these restrictions could pave the way to lifting tariffs, which remain in effect.

US Treasury Secretary Scott Bessent cleared up any confusion about the trade deal and tariffs, stating,

“Now our tariffs are 30% on China, theirs are 10%. 20% fentanyl tariffs on China remain in place.”

Markets Eye Export Trends and Tariff Developments

Although market reaction to the US-China trade deal was mixed, easing trade tensions boosted demand for Hong Kong and Mainland China stocks. Hopes of further stimulus measures also bolstered investor appetite for Mainland China stocks. However, concerns about the effect of ongoing tariffs on external demand capped monthly gains.

In June, the CSI 300 and Shanghai Composite Index advanced 2.5% and 2.9%, respectively, while the Hang Seng Index gained 3.36%. In contrast, the Nasdaq Composite Index jumped 6.57% in June on easing geopolitical risks and rising bets on multiple Fed rate cuts.