President Donald Trump’s former Secretary of Commerce doesn’t think the trade deal between the US and China is close to being “done.”
“It looks as though they made a fairly modest deal, mostly focusing on export controls on both the US side and the China side,” Wilbur Ross, who was part of the first Trump administration, told Business Insider. “So it’s far from a comprehensive deal.”
On Wednesday morning, Trump said on Truth Social that the deal with China is now “done.”
“It seems more or less to be reiterating the deal they thought they had set a few weeks ago,” Ross said of the deal.
China and the US reached a trade framework agreement on Tuesday, after their respective negotiation teams held two-day talks in London. The current Secretary of Commerce, Howard Lutnick, is part of the US trade talk team.
“Full magnets, and any necessary rare earths, will be supplied, up front, by China,” Trump added in all caps in the post. “Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!).”
Ross said that the deal has not addressed many important issues, including intellectual property, so it may be too soon to call this a victory.
“The Chinese side has been very careful to say it still needs to be approved by President Xi,” said Ross. “When we negotiated with the China side last time, it wasn’t unusual for the trade negotiators to agree to something, and then they would go back to Xi, and he would not go along with it.”
This year in duties on imports from China reached up to 245% on some goods. On May 14, many of the tariffs on China were reduced to 30% for 90 days, with a deadline of August 12.
A 10% baseline tariff is still in place on the rest of the world, while additional higher tariffs on 75 countries have been paused until July 9.
Ross said that it would be important to complete at least a few deals with key trading partners before the tariff pause on 75 countries expires.
“I think that will help clear the air for the stock market because it’ll start to show a direction and that there is a way to get all these things resolved,” he said. “It’s very important from a bond market point of view and from an equity market point of view.”
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