U.S. President Donald Trump took to his social media platform, Truth Social, on Wednesday to proclaim that a deal with China was “done,” pending final approval from himself and Chinese president Xi Jinping. 

The post followed days of trade talks in London, where Washington and Beijing tried to save an uneasy truce in their budding trade war, threatened by complaints about export controls and visa revocations.

Trump announced that the U.S. would charge a 55% tariff on Chinese goods, while Beijing would impose a 10% tariff on U.S. goods. He also proclaimed that China will continue to export magnets and rare earth materials, while the U.S. would allow Chinese students to continue studying the U.S.

Still, Asian markets weren’t thrilled by the news that a deal had, once again, been reached. Hong Kong’s benchmark Hang Seng Index closed down by about 1.4%, while Japan’s Nikkei 225 dropped by about 0.65%. China’s CSI 300 was essentially flat. 

One reason for the chilly reception could be that China only officially commented on the deal in the late-afternoon Thursday Asia time. Lin Jian, a foreign ministry spokesperson said at a regular press briefing that both sides should “abide” by the consensus reached following the latest meetings in London. Lin also said China has always kept its word and delivered results.

Another reason might be that the deal—even in the form Trump characterized in his social media post—merely brings things back to the level proposed on April 2, or “Liberation Day.” Then, Trump announced a 34% “reciprocal tariff” on Chinese imports which, on top of a previously announced 20% tariff tied to Beijing allegedly not doing enough to stop fentanyl smuggling, hiked rates to 54%. 

Tariffs on Chinese imports rose to a staggeringly high 145% after rounds of tit-for-tat retaliation. Yet economists think that even a 55% tariff is close to the level where most goods trade between the U.S. and China would be wiped out. 

Shipping volumes were already starting to collapse in late April, as steep U.S. tariffs on China began to take effect. (These tariffs were mostly suspended as part of negotiations in Geneva.)

Analysts expect tariffs to cause a rise in inflation in the coming months, even though recent inflation data has come in cooler than expected. 

Rare earths and student visas

Trump’s post also refers to two issues that have frustrated both sides since last month’s agreement in Geneva.

The U.S. has accused Beijing of being slow to facilitate exports of rare earths. China holds a dominant position in the production of these materials.

Auto companies have faced shortages of these materials ever since Beijing required companies to apply for a license if they wanted access to these goods. 

Still, while China has agreed to restore rare earth exports, the Wall Street Journal reports, citing sources familiar with discussions, that issued licenses will only last for six months. In return for Beijing easing rare earth controls, the U.S. reportedly agreed to relax some of its own export restrictions on goods like jet engines and ethane. 

In his post, Trump also pledged to allow Chinese students to continue studying in the U.S. 

On May 28, Secretary of State Marco Rubio said the U.S. would revoke the visas of Chinese students with ties to the Chinese Communist Party, or those working in “critical fields,” normally used to refer to those working in tech or the sciences. He also added that the State Department would enhance scrutiny of all visa applications from mainland China and Hong Kong.

There are around 280,000 Chinese students currently studying in the U.S. Higher education is a U.S. export.

In his Wednesday post, Trump said that he had “always been good” with Chinese students attending U.S. universities. 

Mixed messaging

U.S. investors on Wednesday were cool to Trump’s announcement of his “done” deal. The S&P 500 dipped by 0.27%, while the Nasdaq 100 fell by 0.5%.

As of 4:00 a.m. Eastern time, S&P 500 futures are down by 0.4%. 

The 90-day window for U.S. trading partners to negotiate a deal to avoid Trump’s “Liberation Day” tariffs is fast closing. Unless the U.S. extends the tariff pause, which applies to all countries except China, import duties will rise far beyond the current flat 10% rate in early July.

On Wednesday, U.S. Treasury Secretary Scott Bessent said that the U.S. will extend the pause for countries negotiating “in good faith.” 

Yet in comments to reporters on Wednesday, Trump suggested that he was prepared to make an ultimatum to trading partners, unilaterally setting a tariff rate in what the president characterized as a binary take-it-or-leave-it deal. 

So far, the U.S. has only managed to successfully negotiate a deal with the U.K. Officials are currently talking with several other economies, including India, Japan, South Korea and the European Union. 

Update June 12, 2025: This story has been updated to include comments from China’s Ministry of Foreign Affairs’ regular press briefing.

This story was originally featured on Fortune.com

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Huawei, the Chinese tech giant, has borne the brunt of U.S. restrictions since 2019, when Washington barred it from acquiring advanced components. Export controls passed in 2022 further constrained Huawei’s ability to get advanced chips. 

But despite U.S. pressure, Huawei is returning to the forefront of China’s tech sector, with new successes in smartphones, AI processors and EVs. Observers, in and out of China, see Huawei as proof that the country can succeed even if cut off from advanced technologies produced in the West. 

Yet Huawei’s founder is cautioning against reading too much into the tech giant’s progress. Ren Zhengfei, in a Tuesday interview with People’s Daily, the Chinese Communist Party’s official newspaper, said that the U.S. was overstating Huawei’s successes. He suggested the company’s chips were still a generation behind the U.S.

“Huawei is not that great. We have to work hard to reach [the U.S.’s] evaluation,” he said. 

Nevertheless, Ren batted away concerns that U.S. export controls will constrain the growth of both Huawei and the Chinese tech sector.

The Biden administration argued that chip export control measures would slow China’s tech developments and maintain the U.S.’s edge in industries like AI. U.S. rules now bar Chinese companies from buying the most advanced chips, as well as the equipment and software needed to design and manufacture them. 

Yet Ren countered that chip packaging and stacking techniques could help Chinese semiconductor firms keep up with the most advanced chips. (Stacking involves bundling multiple chips into a package to get higher performance).

Ren also argued that an increasingly open-source environment will benefit the country in the future. 

Chinese tech companies are reportedly embracing RISC-V, an open-source platform that can be used for chip design.

Several of China’s leading tech companies, like e-commerce giant Alibaba and startup DeepSeek, have also made their AI open-source, allowing other developers to download, run and tweak the models themselves. That’s encouraged more widespread adoption, including outside of China.

Export controls to the fore

Ren’s comments come as export controls start to dominate U.S.-China trade conversations. 

Trade officials from both countries are meeting in London for a second day of trade talks. The U.S. has accused China of slow-rolling its shipments of rare earths, critical minerals used in an array of sophisticated products, including smartphones and cars. 

China holds a dominant position in the production of rare earths. Beijing restricted exports of these metals in April, requiring companies to apply for a license to export rare earths out of the country. These regulations are snarling supply chains for some manufacturers, particularly in the auto industry. 

It’s an odd reversal of positions for the U.S., which increasingly uses export controls to leverage its edge in strategic technologies. Chinese officials have long complained about U.S. tech export restrictions, arguing–among other things–that they undermine globalization and threaten China’s development. 

U.S. Commerce Secretary Howard Lutnick is taking part in the London talks, which could be an indication that some U.S. restrictions could be up for negotiation. 

This story was originally featured on Fortune.com

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