Trump's Trade Bluff Just Blew Up in His Face — China Gave Rare Earths, But Only Short-term Licenses

0:00 On Friday, we had this so-called trade truce between US and China. Uh, US has confirmed a trade deal. China has confirmed it. But what are the details? Do we exactly know what's in the details? Yeah, there's plenty of room for the China US deal to go pear-shaped. President Trump stood in front of cameras and called it a win. Just days ago, the White House confirmed what it called a framework agreement with China signed in Geneva, then reaffirmed in London. Market surged. The S&P 500 hit a new high. Trump celebrated the moment as a triumph in his 90 deals in 90 days campaign. But while the headlines screamed victory, the fine print was nowhere to be found. No official document, no detailed terms, no timeline

0:45 for enforcement. And beneath the surface, the question was already forming. Is this a lasting peace or just a 90-day pause before the next trade war begins? On June 13th, Beijing signaled a willingness to ease its restrictions. That'll buy some time, but insiders say it's a patch. The export licenses the Chinese government is issuing expire in 6 months. On paper, the deal delivers real concessions. China has agreed to restart limited exports of rare earth elements critical minerals used in everything from smartphones and satellites to electric vehicles and military jets. These exports had been nearly frozen since April 2024, causing a 40% price spike within 3 weeks. Ford and several automakers were forced to shut down

1:30 production lines. The supply shock was global. Now, with new six-month export licenses issued by Beijing, some relief is on the way, especially for US auto firms in Detroit. In return, the US agreed to reduce key tariffs, cutting rates from 55% down to 10% on certain Chinese goods. The administration also loosened visa restrictions for Chinese students seen as a goodwill gesture. There's also movement on fentinel. China has signaled it will take concrete steps to ban key precursor chemicals, addressing a major priority for the US. But here's the catch. None of these measures are permanent. The rare earth licenses expire in 6 months. The tariffs are only suspended and the promises on fentinol remain verbal. This isn't a

2:16 deal. It's a truce and an unstable one. They said China firmly opposes any country reaching trade agreements with the US that would sacrifice China's interests in exchange for tariff relief and then promised those uh unspecified counter measures. While Washington praised the deal, Beijing added its own terms. 2 days after the Geneva announcement, China's Ministry of Commerce released a sharp statement. It firmly opposes any trade agreements that sacrifice China's interests in exchange for tariff relief. The warning wasn't subtle, and it wasn't just for the US. Beijing made clear it would retaliate against any country signing bilateral deals with Washington that undercut its position. Behind the scenes, China is already delaying rare earth export approvals. Thousands of license

3:03 applications are stuck in the system. Industry insiders say the flow of critical materials may take months to normalize, if it happens at all. At the same time, China is holding back on fentinil enforcement. Analysts at Bloomberg and the China show report that Beijing is keeping that card in reserve ready to use only if it sees real movement from Washington. It's a chess game and Trump may have moved first, but China has more than a few pieces left on the board. This was supposed to be Trump's breakthrough moment proof that his tariff strategy worked. And in some ways it did. The US got access to rare earths, a possible breakthrough on fentinel and a chance to avoid economic disruption. But every part of this deal is temporary, conditional, unwritten.

3:48 China hasn't forgotten the last time a deal broke down, and this time it's acting more cautiously, using timing and bureaucracy to test Trump's patience. Meanwhile, back in Washington, voices inside the administration are already split. Treasury Secretary Scott Bassant wants to keep the 10% tariffs in place. Trump says he can bring back 25% tariffs anytime. That uncertainty alone could rattle markets again. So, yes, Trump got the headline he wanted, but what comes next will depend not on what he signed, but on what both sides actually deliver because this wasn't the art of the deal. It was the art of the truce and that's a very different game on that, which is that this afternoon, obviously there are a few hours ahead of us, the Chinese Ministry of Commerce has

4:33 put out a statement uh confirming that a framework agreement has been reached. And in this statement, they go on to say that some of the restrictive measures imposed by the United States are going to be lifted. Now, Donald Trump announced that the United States had signed a trade deal with China. On the surface, it sounded like a breakthrough. But this time, something was different. China responded. The Chinese government officially confirmed a trade framework had been reached. But while Washington celebrated, Beijing remained measured, cautious, and calculated. The contrast between both sides said more than the deal itself and it raised an important question. Who truly shaped this agreement? We hope the US will work with China to

5:19 implement the important consensus reached during a phone call between the two heads of state. Both the Chinese foreign ministry and the China's ministry of commerce stress that China expects the US to meet its halfway leverage the China US economic and trade consultation mechanism more effectively from Beijing. The announcement came with none of the theatrics. The Ministry of Commerce issued a brief statement acknowledging the deal. The language focused on dialogue, mutual understanding and stability. No mention of victory, no images of handshakes, no press conference. Chinese officials emphasized continuity, not change. They described the framework as a result of steady consultations and positioned

6:04 it as a step toward global economic stability. There was no reference to Donald Trump, no personal credit given, just a neutral, almost clinical confirmation of the facts. Buddy, so this is not exactly a new trade deal. This was formalizing talks that already happened uh in mid June. Behind the headlines, the agreement itself was not new. It finalized terms that had already been negotiated in midJune. At the core of the deal was a trade-off involving tariffs and rare earth minerals. The US agreed to reduce its tariff rate on Chinese imports from the previously threatened 145% down to approximately 30%. China in return maintained its baseline tariff of 10% on

6:51 US goods. Most critically, China agreed to start reviewing and processing export applications for rare earth elements, a sector it dominates, controlling over 90% of global processing. Earlier this year, as tensions escalated, China had begun tightening control over its rare earth exports, creating supply pressure on US manufacturers in technology, defense, and energy. In response, Trump imposed counter measures, including tariff hikes and export restrictions. This new framework represented a pause. China would resume limited rare earth exports under regulatory review and the US would ease some restrictions, but there was no mutual tariff roll back, only a freezing

7:36 of further escalation. The stock market welcomed the announcement. On the day the framework was confirmed, the S&P 500 rose nearly 1% and the NASDAQ approached an all-time high. For investors, the deal removed immediate uncertainty. It signaled that the risk of new tariffs or sudden retaliation had been avoided. But analysts across Bloomberg, the Times, and Reuters pointed out that critical issues remained untouched. Technology transfers, intellectual property protection, and long-term tariff strategy were all missing. The framework appeared more like a tactical pause than a durable resolution. You know, has Trump really gained anything from this? It's difficult to

8:22 see. He's obviously going to try and paint it as some sort of victory, but we'll have to wait till we see the details. But Trump needed the deal. With mounting pressure at home to pass his signature one big beautiful bill, he required a foreign policy win to strengthen his domestic narrative. The bill, which promises up to $10,000 in annual tax cuts for middle class families, has faced Republican push back due to its projected cost and proposed Medicaid cuts. At the G7 summit earlier that week, Trump left early, skipping private meetings with key trade partners. His administration insists that more deals are coming, including with India and the UK, aiming for completion by Labor Day. This China framework is the first on that path, but

9:08 it's far from decisive. In Washington, the framework was announced with enthusiasm. In Beijing, it was acknowledged with restraint. There was no ceremony, no coordinated messaging, no sign of celebration. The tone from China suggested a calculated move, a step to manage risk, not to concede. Trump framed it as a win. But the quiet confidence from Beijing hinted that this was a deal they had already prepared to accept. And that leaves one final question. Was this Trump's breakthrough or China's quiet containment? Well, we just signed with China yesterday, right? Just signed with China. The deal sets out terms from earlier talks, but still depends on

9:55 future action. This week, President Donald Trump made the announcement he had waited months to deliver. The United States has signed a trade deal with China. The crowd cheered. The optics were perfect. But behind the celebration was a quiet question. Did this deal really change anything? After years of tariffs, strained supply chains, and rising prices, has anything actually improved? The deal, you remember, we had uh a trip to uh Geneva, and then that was being slow played. We got back together in London and that deal was signed and sealed uh two days ago. Yeah, it came as a bit of a surprise overnight when President Trump announced that he had signed a deal with China. But actually, so far, we haven't heard anything from the Chinese side to confirm this. So

10:42 still waiting for details on that. Commerce Secretary Howard Lutnik confirmed it. The deal he said was finalized after negotiations in Geneva and London. This agreement now signed and sealed essentially locked in the outcomes of those earlier talks. Under the deal, the United States maintains its existing 55% tariffs on a wide range of Chinese goods. a level that includes both the original Trump era tariffs from his first term and new additions in 2025. In response, China will continue applying its 10% retaliatory tariffs on US exports. In exchange for keeping the tariff status quo, China has agreed to continue exporting rare earth minerals to the US, critical materials for electronics, defense, and clean techch.

11:30 Meanwhile, the US will ease restrictions on ethane exports to China. Ethane is a chemical crucial to China's plastics industry and American suppliers dominate the global market. With factories in China reportedly at risk of shutting down due to supply shortages, this concession was significant. However, beyond rare earths and ethane, key areas remain untouched. Semiconductors, chip design software, aircraft engine parts, industries at the heart of US China tensions are notably absent from this agreement. It's also worth noting that as of now, there has been no formal confirmation of the deal from the Chinese government. The agreement has been announced solely by US officials and Beijing has remained publicly silent.

12:15 And now we're earning up to 30 billion a month in tariff revenue so far. And as you get to July 9th, that number is only going to go higher. We're going to announce a whole bunch of deals over the next week or so. To President Trump, this wasn't just a deal. It was a triumph. At the signing event, he spoke with confidence, describing the agreement as a step toward opening up China in ways never seen before. He framed it as a personal victory, not just a win for America, but a confirmation that his hardline approach had forced China back to the table. Trump and his close circle including Lutnik and director Russ Vout see this as proof that the tariff strategy worked and that more deals are on the way. India he said could be next

13:03 Europe too. His team is preparing what he calls a tariff map for the world categorizing countries based on their trade balance with the US and assigning tariffs accordingly. But while Trump celebrates, economists and business leaders are still asking the same question. What actually changed for US businesses? Little has changed. The 55% import tariffs remain. Manufacturers are still paying more for Chinese components. According to the US Chamber of Commerce, these tariffs have cost American households an average of $1,200 per year since 2018. That figure remains unchanged. Chinese e-commerce firms like Tamu and Sheen continue to face restrictions after the US removed duty-free exemptions for

13:50 small packages. Chinese retail exports to the US are down sharply in 2025 and tech tensions around chips, AI, and critical software were untouched by this deal. Financial markets barely reacted. Bloomberg noted that investors expected tariffs to stay in place and they did. So why sign this now? One answer, the clock. Trump's 90 deals in 90 days campaign has a July 9th deadline, and only a handful of deals have materialized. The truce with China was set to expire in August. But signing it early gave Trump something tangible to show before the deadline. In that sense, the deal may be more about politics than policy. A signature, a press event, a message. We got it done. Trump says

14:38 everyone wants to make a deal. But if the deal keeps tariffs in place, ignores tech disputes, and restates old terms, who really benefits? For now, American companies are still paying, Chinese exporters are still restricted, and the real issues still waiting for a real solution.